Currency Outlook

This report examines the global currency outlook, highlighting the shift from geopolitical risk-based drivers to fundamental factors like US central bank policy. It also explores the rising prominence of tokenised gold and the strategic reserve role of physical gold for central banks.

Key Takeaways

• 1.FX is caught in a cycle between geopolitical tensions and central bank policy; the USD is currently driven more by yields and growth rather than pure safe-haven status.
• 2.Tokenised gold is a rapidly growing asset class, enhancing liquidity and programmability compared to traditional ETFs.
• 3.Gold has confirmed its reserve status with central banks, now comprising a higher share of official reserves than the Euro.

Table of Contents

• Summary
• FX: Key trade themes
• G10 at a glance
• Asia at a glance
• CEEMEA at a glance
• LatAm at a glance
• Overview: The cleanest dirty shirt
• EUR: Downside risks are growing
• NZD: Swept up
• Tokenised gold: from acorn to oak tree
• Gold & Central Banks: The biggest asset
• What drove the FX market…
• HSBC Little Mac Valuation Ranges

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