Newsletters
Subscribe
Get insight into the latest trends and developments in global currency markets with breaking news updates and research reports delivered right to your inbox.
Subscribe
Get insight into the latest trends and developments in global currency markets with breaking news updates and research reports delivered right to your inbox.
Latest Blog Entries
Latest Blog Entries
Knee-Jerk Market Reaction Fades On Mixed US Inflation Print
15 July, 2025
US inflation printed below expectations for a fifth consecutive month in June as tariff-led price increases in core goods categories were offset by softness in the services sector and in automobile costs. According to data published by the Bureau of Labor Statistics this morning, the core consumer price index – with highly-volatile food and energy prices excluded – rose 2.9 percent in June...
Markets Keep Playing Chicken With Trump
14 July, 2025
Financial markets are beginning the week in a remarkably-calm state after the Trump administration spent the weekend escalating its trade war and stepping up its assault on Federal Reserve chair Jerome Powell. The dollar is trading on a slightly firmer footing after posting its best performance since February last week, Treasury yields are up incrementally, and equity futures are pointing to modest...
Trump Raises Tariffs on Mexico and the European Union to 30 Percent
12 July, 2025
Currency markets are headed for another bruising open when trading begins in Asia tomorrow afternoon after President Donald Trump delivered another set of letters threatening to impose higher tariffs on Mexico and the European Union. In two missives posted to his social media platform, the president said taxes on imports from two of America’s most important trading partners would rise to 30 percent...
Dollar Firms As Trump's Letter-Writing Campaign Accelerates
11 July, 2025
The dollar looks set to end the week on a more supportive footing after Donald Trump redoubled his efforts to revive the forgotten art of letter writing, threatening to substantially raise tariffs on Canadian goods and warning that he would soon announce increases in levies on most other countries. Ten-year yields are little changed, equity futures are setting up for a softer session, and currencies...
Canadian Dollar Tumbles As Trump Ups Tariff Ante With 35-Percent Threat
10 July, 2025
Update: Bloomberg is reporting that a US official has clarified that the new tariff threshold is NOT intended to apply to USMCA-compliant goods, suggesting that the impact on the Canadian economy could be far smaller than might otherwise have been the case. Our admittedly-unscientific estimates suggest that roughly 80 percent of Canadian exports to the US could ultimately meet the qualification criteria...
Tariff pen pals
09 July, 2025
• Holding on. US sends out more tariff letters. Equities unfazed with S&P500 pushing higher. Bond yields dip. USD consolidated. AUD range-bound.• RBNZ steady. RBNZ on hold. But underlying tone & outlook still points to a bit more easing over coming months. This should act as a NZD handbrake.• AUD trends. AUD hovering near top end of its multi-month range. We think the risks of a USD rebound...
Currency Traders Yawn As Tariff Threats Continue
09 July, 2025
Currency markets remain firmly rangebound even after President Donald Trump warned “no extensions will be granted” to his August 1 tariff date, threatened to raise levies on copper and pharmaceutical imports to 50 percent and 200 percent, respectively, and said at least seven additional countries would receive updated trade letters this morning, with the European Union getting one in two days. Stock...
Trump's Tariff Letters Leave Markets Largely Unmoved
08 July, 2025
The dollar is losing altitude once again after Donald Trump reignited trade tensions with a fresh round of tariff threats, unsettling global markets and complicating the outlook for monetary policy. Trump sent letters to 14 countries last night—including close allies and key trading partners Japan and South Korea—threatening them with the reimposition of tariffs from August 1, and more are expected...
Markets Trade Sideways As Trade Uncertainties Loom
07 July, 2025
The dollar is holding near a three-year low and measures of risk appetite are pointing to subdued trading action after the Trump administration seemingly extended its tariff deadline to August 1—reducing fears of a violent selloff around Wednesday’s original drop-dead date. Measures of trade policy uncertainty* have fallen sharply from their heights. At an event dubbed “Liberation Day” in early April,...
Jobs boost
03 July, 2025
• Upbeat tone. US equities, bond yields, & the USD edged up overnight. EUR eased back, as did NZD & AUD, though they remain at high levels.• US data. US jobs report a bit better than expected. But topline result masks some pockets of weakness under the hood. Private payrolls were soft.• Event radar. US on holiday tonight. Next week RBA & RBNZ meet. RBA expected to cut rates. US’ ‘pause’...
Latest Market Views
Latest Market Views
External threats could send the loonie tumbling lower, but falling interest rates argue for some upside.
10 December, 2024
The Canadian dollar’s underperformance has deepened over the last two years. Soft commodity prices, subdued investment, and rising household borrowing costs—the heaviest in the G7—are weighing on economic growth, forcing the central bank to ease policy more aggressively than the Federal Reserve. Donald Trump’s imminent return to the White House has reignited trade uncertainties, putting the exchange...
The bullish narrative behind the dollar remains powerful—and highly plausible
10 December, 2024
The consensus expects the dollar to outperform again in 2025, and there are good reasons to stick with the herd. The US economy is demonstrating remarkable resilience, defying expectations for a policy-induced slowdown. Household balance sheets remain solid, labour markets are tight, and real disposable income is climbing—bolstering consumer spending. A supportive fiscal stance, coupled with advances...
As frustrating as it might be for US policymakers and others across the global economy, the dollar’s value could remain high
10 December, 2024
Both Donald Trump and JD Vance have expressed a desire to weaken the dollar, but deliberate efforts to achieve this look unlikely to succeed: Fiscal tightening, which could weaken growth and lower relative interest rates, appears improbable given the incoming administration’s focus on tax cuts and sustained government spending. The Federal Reserve is legally and structurally insulated against...
Investors are positioned for a repeat of Donald Trump’s first term, but this could prove too simplistic
10 December, 2024
Starting conditions today differ starkly from 2017. Government finances are far more stretched, limiting the scope for new fiscal stimulus. Inflation remains somewhat elevated, forcing the Federal Reserve to maintain tighter monetary policy. Higher interest rates are biting: job creation has slowed, the housing market has weakened, and businesses are cutting back on investment. Government finances...
The ‘US exceptionalism’ trade could run out of runway by the middle of the year
10 December, 2024
The US dollar is poised for a promising start to 2025, buoyed by a confluence of supportive factors. Strong domestic fundamentals, a relatively-hawkish Fed, optimism surrounding Donald Trump’s electoral victory, and a weak economic backdrop in the rest of the world should underpin incremental gains. But the honeymoon is unlikely to last. The delayed impact of the Fed’s aggressive post-pandemic...
2025 Projections
10 December, 2024
We think currencies will follow non-linear paths in 2025 against a highly-turbulent global economic backdrop. Note: Our forecasts are predicated on an outlook in which the US staves off recession, a financial crisis does not occur, and major global geopolitical shocks are avoided. Among other risks, an unexpectedly-abrupt economic deceleration, plunge in asset prices, or outbreak of war could see safe...
The euro looks doomed to grind lower, yet there are reasons to expect a shift in fortunes as the dollar’s outperformance fades
10 December, 2024
The euro area is stuck in a deepening economic quagmire. An export-dependent and manufacturing-heavy growth model is coming under strain as geopolitical tensions keep energy prices elevated, China moves up the value chain and dumps excess industrial capacity into the rest of the world, and the US becomes more isolationist. Domestic political dysfunction is worsening, productivity growth is sluggish,...
Mexico’s relationship with the US may be on a rocky footing, but this isn’t the country’s first rodeo
10 December, 2024
Peso fundamentals are relatively supportive: the economy is growing at a solid clip, inflation remains well-contained, fiscal and current account deficits look manageable, and the central bank’s policy rate remains well above its US equivalent. Political uncertainty is falling after the summer election and this autumn’s judicial reforms. The outlook nonetheless hinges on whether US President...
A repricing in policy expectations could weaken sterling in the early new year, but economic resilience points to a recovery ahead
10 December, 2024
The British pound faces a turbulent outlook in 2025, shaped by conflicting domestic and international forces: After a distinct loss of economic momentum in 2024, labour markets are softening, putting wage gains under pressure and driving inflation expectations lower. We think the Bank of England will cut rates more aggressively than markets anticipate in the near term, limiting the extent to which...
Geopolitical and macroeconomic headwinds could blow harder in 2025
10 December, 2024
The Chinese renminbi should steadily weaken against the US dollar, and struggle against other currencies such as the Australian dollar, Japanese yen, and euro over the next few quarters. In our judgement, the pricing-in and enacting-of US President-elect Trump’s trade policies will likely see a greater risk premium attached to the yuan, given the economic headwinds the protectionist measures may create...