This report outlines a shift in FX market drivers from geopolitical risk to interest rate spreads as the US-Iran conflict eases. Analysts maintain a bearish view on the US dollar over the medium term, expecting yield differentials to normalize as inflation subsides.
Key Takeaways
- 1.Market focus has shifted from the US-Iran conflict to US rate differentials after a 60-day ceasefire extension.
- 2.The Fed is expected to pause, with inflation risks subsiding as energy prices retrace pre-conflict levels.
- 3.China's Politburo meeting in July is anticipated to provide key guidance on H2 growth support and FX stability.
Table of Contents
- KEY EVENTS IN THE MONTH AHEAD
- MAJORS
- LATAM
- EUROPE & S AFRICA
- MENA
- ASIA
- Forecast rates against the US dollar
- US dollar
- Japanese yen
- Euro
- Pound sterling
- Chinese renminbi
- Australian dollar
- New Zealand dollar
- Canadian dollar
- Norwegian krone
- Swedish krona
- Swiss franc
- Czech koruna
- Hungarian forint
- Polish zloty
- Romanian leu
- Russian rouble
- South African rand
- Turkish lira
- Indian rupee
- Indonesian rupiah
- Malaysian ringgit
- Philippine peso
- Singapore dollar
- South Korean won
- Taiwan dollar
- Thai baht
- Vietnamese dong
- Argentine peso
- Brazilian real
- Chilean peso
- Mexican peso
- Saudi Riyal
- Egyptian Pound
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Authors
Derek HalpennyLee Hardman
Securities
DXYBrent Crude Oil
Themes
Energy Price RetracementFed Policy Normalization
Regions
GlobalAsia PacificUnited StatesJapanChina