This report analyzes the recent shift in US dollar momentum following softer jobs data and the resulting implications for global central bank policies, specifically the BoJ and ECB.
Key Takeaways
- 1.Weaker US employment data and disinflation signs are driving a turn in momentum back toward a weaker US dollar.
- 2.The Bank of Japan is expected to turn more hawkish with a rate hike projected by September 2026.
- 3.The euro-area economy shows signs of resilience, potentially helping the EUR bottom out despite recent dovish repricing of ECB rate hike expectations.
Table of Contents
- USD upside risks curtailed for now
- JPY: BoJ to turn more pro-active
- EUR: Is the stage set for the EUR to extend its correction lower?
- Weekly Calendar
- Closed Trade Ideas
- FX Portfolio
- FX Positioning
- JPY Flows – Balance of Payments
- Historical Trading Range Breakouts for USD
- Disclaimer
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Authors
Derek HalpennyLee HardmanAbdul-Ahad Lockhart
Securities
DXY
Themes
Central Bank Policy DivergenceInflation Risks
Regions
EuropeAsia PacificUnited StatesJapanFrance