FX Strategy

Current FX strategy research highlights a resilient US Dollar (DXY) supported by a rebounding manufacturing sector and safe-haven demand, despite long-term projections of an initial dip to 96.3 before a year-end recovery to 100.0 in 2026. In Asia, the Japanese yen remains highly volatile, navigating intervention rumors and domestic election uncertainty, even as the Bank of Japan’s 2.2% CPI forecast signals an earlier path toward rate normalization. Regional stability is being anchored by the PBOC’s commitment to keeping USDCNY below 7.0000, which has provided a tailwind for the Singapore dollar and Malaysian ringgit. Meanwhile, the Indian rupee has benefited from strategic US tariff cuts, though the loss of discounted Russian oil poses potential medium-term risks to India's current account. Elsewhere, a dovish shift is emerging in Central and Eastern Europe and Thailand to address deflationary pressures, while Bank Indonesia maintains a restrictive stance to support its currency. Finally, heightened geopolitical risks in the Middle East and a correction in procyclical assets are reinforcing the dollar’s role as a primary hedge against global volatility.