Currency Outlook

HSBC's May 2026 outlook suggests the USD is range-bound in a 'soft orbit' as geopolitical drivers yield to central bank policy. Key highlights include Japanese JPY intervention and a growing divide in the stablecoin market between regulated institutional assets and crypto-native tokens.

Key Takeaways

• 1.The broad USD is expected to remain in a 'soft orbit' as central bank fundamentals regain importance over waning geopolitical tensions.
• 2.Japanese authorities likely intervened in the FX market between April 30 and May 6, selling an estimated USD 65bn to defend the 160 level in USD-JPY.
• 3.Stablecoins are undergoing functional differentiation; the market is pivoting from regulatory status alone to factors like reserve quality and 'moneyness'.

Table of Contents

• FX: Key trade themes
• At a Glance
• Overview: Stuck
• GBP: Testing the line
• JPY: Intervention questions
• CAD and oil
• Not all stablecoins are created equal
• Silver: After the gold rush
• What drove the FX market...
• Exchange Rates vs USD
• G10 Exchange Rates
• Asia Exchange Rates
• CEEMEA Exchange Rates
• LatAm Exchange Rates

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