EMEA G4 Rates and FX Monthly

Mizuho's July 2026 monthly report outlines a central bank divergence narrative, expecting Fed hikes while forecasting a terminal rate for the ECB and a pause for the BoE. The outlook remains pressured by oil price volatility and Middle East geopolitical risks.

Key Takeaways

• 1.Expect US Dollar outperformance versus peers supported by resilient growth and AI, with DXY targeted at 102 by September 2026.
• 2.The ECB is expected to deliver one final rate hike in September before pausing.
• 3.The Bank of England is expected to maintain an 'active hold' policy for the remainder of the year amid sluggish growth and labour market uncertainty.

Table of Contents

• The Background
• The View
• USD
• EUR Rates
• EUR FX
• GBP
• JPY
• XCCY
• The view in full
• EUR Policy
• EUR Rates
• EUR FX
• USD Policy
• USD Rates
• USD FX
• GBP Policy
• GBP Rates
• GBP FX
• JPY Policy
• JPY Rates
• JPY FX

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