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USDCAD drifts lower, but the writing is on the wall
A grind lower for the greenback through Wednesday’s trading saw USDCAD fall 0.4% over the course of the day. read more
The yuan’s fortunes look less constructive
With the US and Chinese economic prospects starting to diverge, we now think USDCNY will struggle to durably break below 7.00 over the coming years. read more
USDCAD breaks into 1.38-1.40 range
The direction of travel is now the right way, and this led USDCAD to break into our Monex analysts' projected range for Q2 (1.38-1.40) yesterday. read more
Sticky inflation to keep rates unchanged in June
While headline inflation continued its downward trend in March, a smaller than expected fall reconfirms the message from yesterday’s pay data. read more
BoC on track to cut in June and quickly thereafter
The Bank of Canada remains on track to cut rates in June despite the latest data showing inflation ticked up from 2.8% in February to 2.9% YoY in March. read more
A decisive day for BoC easing bets
Today should be an instructive day for USDCAD and BoC easing expectations as the economic calendar hosts a double header of March CPI and Governor Macklem. read more
February wage growth should sound a note of caution for the BoE
This morning’s UK labour market data is unlikely to help give the Bank of England sufficient confidence to cut rates in June. read more
Oil vs rates will be the key battle for CAD traders
A further escalation in hostilities could well see a jump in oil prices come to the loonie’s rescue, even if domestic developments lean dovish. read more
A break in the ranges
With a swathe of central bank speakers on the roster for in the coming week, conditions should remain volatile for financial markets. read more
The loonie looks set to soften further as traders digest a dovish BoC
With traders now having time to assess the BoC’s dovishness, we see the balance of risks tilted towards further loonie weakness heading into the weekend. read more
The ECB not recommitting, but sets up a cut in June
The ECB has kept rates unchanged once again, maintaining the deposit rate at 4.00% in line with widespread consensus and our own pre-announcement call. read more
USDCAD breaks to fresh four-and-a-half month high
As we predicted, the double whammy of US CPI and a BoC decision saw USDCAD climb sharply on Wednesday. read more
Bank of Canada on track for June cut
The Bank of Canada left its policy rate unchanged at 5% today, which came as no surprise to markets. read more
Bump in US disinflation path looks more like a mountain than a molehill
Both headline and core measures of US CPI landed 0.1pp above expectations on a monthly basis in March, printing at 0.4% MoM respectively on a rounded basis. read more
BoC should light bullish trigger in USDCAD
The combination of both a US CPI report and a BoC meeting means that USDCAD traders are set to receive a double whammy of market moving events today. read more
Banxico to remain cautious even as inflation misses expectations
Headline and core inflation in Mexico came in slightly below consensus expectations for a notable pick-up in inflation in March. read more
Steady ahead of a blockbuster Wednesday
The one factor that remains favouring short term loonie strength is the BoC’s perceived hawkishness, though we expect this to fade at tomorrow’s meeting. read more
USDCAD to break higher as markets realise the BoC isn’t the Fed
Combined with last week's soft data, this week's data should hammer home the message for markets that Canada is not the US. read more
Moving in opposite directions
Next week, we will get to see if the BoC’s Governing Council now agrees with our view, tilting dovish and steer towards commencing rate cuts in June. read more
Strong payrolls print, but June still the base case
The March US nonfarm payrolls print beat all expectations, showing the economy added 303k jobs. read more
Canada’s labour market supports continuous easing from the BoC
The Canadian economy failed to add jobs in March, with employment essentially flatlining on the month. read more
CAD vulnerable to downside correction on weak jobs data
Although the US jobs report will capture headlines later today, traders should not overlook its Canadian counterpart, set to be released simultaneously. read more
Loonie remains rangebound heading into Friday’s jobs
With a key jobs release coming up on Friday, traders' hesitancy to take CAD higher is understandable to our Monex analysts. read more
Softer ISM Services should be treated with caution
The ISM services PMI dropped to 51.4 in March, down 1.2 percentage points from 52.6 the month prior and disappointing market consensus. read more
Monex’s April 2024 FX Forecasts
Our market analysts believe expectations of monetary easing across the G10 are likely to diverge further in April. Here's Monex's latest FX forecasts for April. read more
Hard to turn constructive on CAD, even as oil rallies
The loonie has struggled to find its typical oil beta, in contrast to the similarly oil sensitive NOK, which rallied by more than 1% against the dollar. read more
BoC surveys support dovish stance on Canadian rates
The BoC’s Business outlook survey offered a grim readthrough on prospects for the Canadian economy, adding to the data evidencing the damage of high rates. read more
Breaking for Easter but not higher for the dollar
Next week should start off quieter as the Easter holidays in many parts of the world bring reduced liquidity and limited price action across FX markets. read more
Canada’s economy rises from its slump, but it’s not all good news
The Canadian economy grew 0.6% MoM in January, beating expectations and Statistics Canada’s flash estimate by 0.2 percentage points. read more
A miss in GDP could send USDCAD north of 1.36
Canadian GDP figures published at 12:30 GMT are expected to show a pickup in activity in January, with the economy growing by a respectable 0.4% MoM. read more
Loonie left in the hands of Waller ahead of GDP tomorrow
The focus for loonie traders now turns towards a speech by Fed Governor Waller later today, before tomorrow's GDP release. read more
Deputy Rogers poses asymmetric risks for BoC easing bets
BoC Senior Deputy Governor Rodgers is set to speak at today on the urgent need to improve Canadian productivity. read more
USDCAD flirts with a breakout to the upside
Even in spite of the BoC’s hawkishness, USDCAD continues to flirt with year-to-date highs. read more
Taking time to digest
After a week full of central bank policy decisions, in the coming week, markets will have further opportunity to digest these developments. read more
CAD back to pre-Fed lows ahead of retail sales
For loonier traders, today Canadian retail sales data is released, expected to show that consumer activity softened in January. read more
Bank of England lays the foundations to cut
The Bank of England has left Bank Rate unchanged at 5.25% once again, in line with consensus expectations and our forecast. read more
March PMIs point towards a two speed Europe
March flash PMIs continue to highlight the contrasting fortunes of European economies. read more
The SNB commences the G10 easing cycle
The Swiss National Bank today cut its policy rate by 25bps to 1.5%, making it the first G10 central bank to cut rates this cycle. read more
Drop in USDCAD provides favourable entry point for long positions
We think yesterday’s slide in the pair offers an attractive entry point for USDCAD longs, with expectations that the pair should move higher through Q2. read more
Fed reiterates confidence to cut this year, but risk of a higher terminal rate grows
FOMC members continue to predict 3 rate cuts this year, but have revised up the 2025/2026 median by 25bps and lifted the longer-term projection moderately. read more
BoC minutes could extend CAD losses pre-Fed
For USDCAD risks look skewed asymmetrically to the upside today, with the potential for dovish BoC minutes and a hawkish Fed meeting. read more
UK inflation cools but not by enough to shift the BoE
Headline UK inflation dropped marginally more than expected in February, with prices rising by 3.4% on a YoY basis. read more
BoC should cut in April, whether they will is another question
Across nearly all measures, inflation pressures in Canada cooled considerably in February, with headline inflation undershooting consensus expectations. read more
SNB preview: Narrowly avoiding being the first to cut
Having effectively brought inflation back to within its target range, the SNB scans as the most likely candidate to kickstart the DM easing cycle. read more
Inflation poses downside risk to CAD
As noted in yesterday’s morning report, the February inflation report due this afternoon is likely to be key for both the BoC and the loonie. read more
Bank of Japan “dovishly” exits negative rates and YCC
The Bank of Japan hiked interest rates for the first time in 17 years today, effectively exiting negative interest rates that had been in place since 2016. read more
Norges Bank Preview: NOK rocking the ship
Whilst we see no risk of the Norges Bank adjusting rates this week, the extent to which the central bank updates its guidance will be important to markets. read more
A jam packed data calendar awaits
FX markets drop down a gear as the lighter data calendar allowed traders to take stock, but this week an abundance of central bank meetings are in focus. read more
UK economy rebounds in January
January’s monthly GDP print showed the UK economy expanded by 0.2%, fuelling hopes that a technical recession for the UK will remain a 2023 story. read more
US inflation keeps Fed easing bets before June at bay
US Headline inflation only just met expectations of a 0.4% MoM increase in February, with the unrounded figure printing at 0.442%. read more
Marginal labour market cooling keeps the BoE on track for an August cut
January’s UK labour market data, released this morning, keeps the Bank of England on track for an August start to policy easing. read more
Is the tide turning for the dollar?
Next week will see data releases from the US, Brazil, the UK, China and Poland, all of which pose notable questions for their respective currencies. read more
Powell’s confidence is not misplaced
Today’s jobs report is the kind that should see confidence building at the Fed, as the headline NFP number indicated 275k jobs added in February. read more
Strong job growth doesn’t justify the BoC delaying until June
For the second month this year, the Canadian economy added an above-trend level of jobs, with net employment increased by 40.7k in February. read more
Lagarde all but shuts the door on an April cut
The ECB kept all policy rates unchanged once again in today’s decision, meeting both consensus expectations and our own pre-announcement call. read more
BoC says it’s “too early” to ease
The Bank of Canada left its policy rate at 5% for a fifth straight meeting today, in line with the broad consensus. read more
Monex’s March 2024 FX Forecasts
With more central bank meetings set for this month, we think policymakers will have to recognise the growing divergence in economic fundamentals. read more
Time to pick up the pace
Activity should ramp up again for FX traders, with the focus first on Switzerland followed by key central banks meetings for both the BoC and ECB. read more
Canada’s economy can’t fulfil its potential despite beating expectations
The Canadian economy essentially flatlined in December following a 0.23% MoM increase in November, as measured on an industry basis. read more
Inflation remains in focus
Next week, inflation dynamics will be in focus, with CPI data out of Japan, two central bank decisions, a Canadian GDP print and eurozone inflation data. read more
Divergent fortunes between the UK and eurozone are on show once again
Green shoots of recovery should not distract from the reality that eurozone activity remains in contraction, highlighted today by eurozone PMI figures. read more
April is now live again for a BoC cut
Thankfully for the BoC, January’s inflation data presented a clearer picture of disinflation, with all indices essentially reflecting weaker growth rates. read more
PBoC provides more support to the housing market
The People’s Bank of China surprised market expectations, cutting the 5-year Loan Prime Rate (LPR) instead of the 1-year LPR. read more
Realised vol to stay high next week
The reopening of Chinese markets and their response to last week’s move in US rates will likely keep volatility high at the start of the coming week. read more
UK retail sales reverse the Christmas slump
January’s retail sales data should put to bed any doubts around the UK’s economic prospects heading into 2024. read more
UK Q4 GDP figures confirm a 2023 technical recession
UK GDP data released this morning confirmed that the UK just barely fell into a technical recession at the end of 2023. read more
UK inflation surprisingly fails to accelerate
January’s UK inflation numbers notably undershot expectations in this morning's release, countering yesterday’s hotter labour market figures. read more
US CPI provides the Fed with another reason to hold
If the prospect of an interest rate cut from the Fed in March wasn’t yet dead, January’s inflation data has just provided the final bullet. read more
SNB to weaken the franc ahead of March rate cut
Today's Swiss inflation data confirms our view that the SNB will loosen monetary policy, primarily through the exchange rate before cutting its policy rate. read more
UK labour market continues to outperform expectations
Today's UK labour market data delivered yet another head scratching outturn, reinforcing our call for no policy rate easing in the first half of this year. read more
UK and US data in focus as China celebrates Lunar New Year
In the coming week, the markets focus will return to G10 currencies, with a number of key data releases set to be delivered. read more
Even Canada’s jobs data isn’t safe
Canada’s macroeconomic data has been incredibly noisy in recent months, making it nigh on impossible to accurately predict the state of the economy. read more
January inflation and a more cautious Banxico point to the March meeting… as the soonest
Headline and core inflation in January continued to show the pace of disinflation in Mexico slowing at the beginning of the year. read more
A blow to easing bets
The focus for many FX traders will switch to emerging markets. However, developed markets still have their share of entertainment coming up. read more
Monster US jobs print deals a blow to Fed easing bets
The US economy added a monstrous 353k jobs in January, beating consensus expectations of just 185k by a considerable margin. read more
Monex’s February 2024 FX Forecasts
With markets having now unwound December’s moves, our FX analysts believe the scope for further US dollar appreciation looks more limited for February. read more
Bank of England bides time before rate cuts
The Bank of England held rates at their first policy meeting of the year, a move widely expected by markets and in line with our pre-announcement call. read more
BCB stays the course despite new faces
Yesterday, the BCB finally decided unanimously to cut the Selic rate by 50 basis points for the fifth consecutive time, to 11.25%. read more
Eurozone disinflation hits a bump in the road
January’s preliminary eurozone inflation overshot expectations by 0.1pp, with headline CPI figures showing price growth of 2.8% on an annual basis. read more
Fed takes next cautious step in the path to cuts
The Federal Reserve today held rates in the target range of 5.25-5.5% for the fourth consecutive meeting in a decision that was unanimously expected. read more
Canadian economy looks set to rise from the ashes in Q4, albeit briefly
Preliminary GDP data for Q4 shows the Canadian economy tracking at an annualised rate of 1.2% QoQ. read more
Focus turns back to the Fed
Next week should see monetary policy continue as a driver for FX markets, with the Fed is set to announce its first policy decision of the year. read more
Lagarde cracks open the door to earlier rate cuts
In a move that surprised almost no-one, the ECB has held rates once again today, maintaining the deposit rate at 4.00% in line with market consensus. read more
The BoC pivot begins
The Bank of Canada maintained its policy rate at 5.00% in the first policy decision of the new year, in line with market consensus. read more
European PMIs remain pointed in opposite directions
A marginal uptick in eurozone PMIs does little to dispel the notion that the bloc is well and truly stuck in contraction. read more
Avoiding talk of cuts
Looking ahead to next week, the overwhelming theme in markets will be the reluctance of DM central banks to begin discussing the path towards policy easing. read more
Sticky inflation set to keep the BoE on hold in early 2024
UK inflation reaccelerated in December, with headline price growth rising to 4.0% YoY, up from 3.9% the month prior, surprising the consensus. read more
A rise in core inflation pressures likely means a hawkish BoC next week
Canadian inflation accelerated in December, rising to 3.4% YoY in line with expectations, but still a 0.3pp increase on November’s 3.1% reading. read more
The labour market continue to cool, but not fast enough to suggest imminent cuts from the BoE
UK wage data showed that pay pressures continue to cool, though not fast enough to see the Bank of England cutting rates until the second half of 2024. read more
UK economy bounces back from October’s slumber
The UK economy grew by 0.3% in November, beating the 0.2% expansion anticipated by markets to completely reverse October’s decline. read more
US CPI adds pressure to the market’s Fed view
Both US headline and core inflation printed at 0.3% MoM in December, with the former landing 0.1pp above expectations and the latter in line with consensus. read more
Macro Outlook 2024: Not so fast – dollar to decline but rout unlikely
This year is set to see policy easing play out across most major economies, though our FX analysts foresee a bumpier ride than many are predicting for 2024. read more
Fed to remain cautious on conflicting labour market signals
December’s nonfarm payrolls delivered a beat to expectations, coming in hotter-than-expected and posing a significant challenge to markets. read more
The curious case of Canada’s jobs market
The Canadian economy failed to add any jobs in December, with employment levels in full-time positions actually falling by 23.5k on the month. read more
Fed meeting minutes show no signs of rate cut discussion, as intimated by Powell
Since Powell’s press conference, members of the FOMC have been actively trying to push back on the market's dovish view. read more
European PMIs point to divergent economic fortunes heading into the new year
November’s PMI figures proved to be a false dawn for the eurozone, pointing to a less than merry Christmas for some European economies. read more
ECB clings onto hawkish narrative, but moves on PEPP
The ECB unanimously held the deposit rate at 4%, despite simultaneously downgrading its 2024 growth, inflation, and core inflation forecasts. read more
The Old Lady’s not for turning
As expected, and unlike the Fed last night, the BoE resisted the urge to pivot to a more dovish monetary policy stance. read more
SNB turns neutral on the franc
The Swiss National Bank held rates on Sight Deposits at 1.75% for the second consecutive meeting, in line with broad market consensus. read more
Rate cuts draw closer for the Fed as the economy seen cooling
The Federal Reserve today tweaked its policy statement and Summary of Economic Projections in a progressively dovish direction. read more
UK growth cools, but is set to recover
UK growth figures surprised to the downside, showing the economy shrank by 0.3% in October, below consensus estimates that looked for a 0.1% contraction. read more
The pace of US disinflation starts to slow
Disinflationary progress in the US effectively stalled in November, giving the Fed further evidence to turn to tomorrow to relay a more cautious message. read more
UK wage growth cools, but not enough to shift the BoE
UK labour market data delivered a downside surprise, confirming no further rate hikes are on the horizon from the Bank of England. read more
November payrolls give Fed reason to be cautious
The US economy added 199k jobs in November, up from 150k in October and marginally above consensus expectations of 183k. read more
BoC holds rates at 5%, delaying discussions of easing until 2024
The Bank of Canada held its policy rate at 5% today for the third successive meeting since it resumed its hiking cycle back earlier this year. read more
Canadian labour market loosens despite strong job growth
November’s jobs report marks another mixed data release out of Canada. Headline employment growth once again proved strong. read more
Monex’s December 2023 FX Forecasts
Whilst our FX analysts maintain a bearish view on the US dollar from mid-2024 onwards, they continue to envisage a stronger dollar heading into 24Q2. read more
Choppy GDP data risks masking underlying weakness in Canadian economy
The first estimate of Q3 GDP showed the Canadian economy contracting -0.3% QoQ, or -1.1% in annualised terms. read more
ECB’s 2% inflation target is in sight
The flash estimate of euro area inflation for November confirmed the disinflationary signals from the national data released over the past day. read more
UK economy accelerates in November
November’s flash PMIs once again support Monex's view that the UK economy is merely in a state of stagnation as opposed to outright contraction. read more
Weak growth in Europe is starting to impact the labour market
The general theme across November’s flash eurozone PMIs is that the continued slowdown in economic growth is starting to manifest within the labour market. read more
Inflation cools considerably in Canada at the start of Q4
Canadian headline CPI fell 0.7 percentage points to 3.1% YoY at the start of the fourth quarter, in line with economist expectations. read more
UK inflation falls sharply as expected, adding to the probability of a soft landing
This morning's October CPI print saw UK inflation decelerate sharply, fractionally undershooting the market consensus. read more
US core services inflation cools, sparking a relief rally against the dollar
US headline inflation fell from 3.7% to 3.2% YoY in October following a flat month-on-month reading, but the focus for markets remains on the core index. read more
UK wages continue to slow under the surface, despite a headline beat
Whilst this morning’s UK labour market data release surprised to the upside on headline measures, the details of the report provide plenty of good news. read more
UK growth exceeds expectations to flatline in Q3
UK GDP figures out this morning revealed a surprise 0.2% economic expansion in September, enough to keep the economy from contracting in the third quarter. read more
Weakness in North American jobs data fuels rate cut speculation
At 150k, however, today’s US net employment figure considerably undershot expectations. Canada’s October jobs report came in similarly soft. read more
Bank of England holds firm at 5.25% despite brewing growth concerns
The Bank of England has held the Bank Rate at 5.25% for the second consecutive meeting, in line with market consensus and our own pre-announcement call. read more
Powell keeps December rate hike alive
The FOMC unanimously voted to keep the policy rate on hold today at 5.25-5.5%, in what became a widely expected decision. read more
Monex’s November 2023 FX Forecasts
November looks like it could bring much of the same as October, with the dollar's path higher set to remain stymied at least in part by rate dynamics. read more
Another quarter devoid of growth leaves the BoC in limbo until 24Q1
The Canadian economy continued to flatline in August, as an increase in the services sector (+0.1% MoM) was netted off by a contraction in goods (-0.2%). read more
ECB holds rates, minimum reserve requirements, and keeps PEPP reinvestment language
The ECB held its main policy rates today at its October meeting, marking the first pause after ten successive rate hikes since the cycle began in July 2022. read more
US economy posts monster gain in Q3, but don’t expect a repeat
In today's release of US Q3 GDP data, the US economy expanded by 4.9% annualised in Q3, beating economist expectations for a 4.5% print. read more
BoC hesitant to call an end to its hiking cycle
The Bank of Canada held rates at 5% for the second consecutive meeting since it resumed its hiking cycle with two consecutive 25bp hikes in June and July. read more
US PMIs show the exceptionalism narrative still has legs
Flash PMI data for the US improved across the board, with S&P Global’s measures of manufacturing, services, and the composite all beating expectations. read more
UK economy seen flatlining in the fourth quarter
The UK's latest flash PMIs show an economy flatlining, but not to an extent that recession appears more likely than not. read more
October’s PMIs increase the likelihood of a eurozone recession in Q4
The eurozone’s flash PMIs made for grim reading yet again, raising the risk of an earlier and more aggressive easing cycle in 2024 than markets are pricing. read more
Soft August retail sales confirm consumer demand slowdown in Canada
Canadian retail sales for August met expectations at -0.1% MoM, softening from a 0.3% print the month prior. read more
Grim retail sales data takes further BoE rate hiking off the table
Retail sales data out this morning showed an alarming slide in consumer spending, putting the prospect of a UK recession back on the table for policymakers. read more
Turning bearish on CAD as recession odds mount
After remaining relatively range-bound for most of 2023, growing geopolitical risks have led the Canadian dollar to depreciate towards year-to-date lows. read more
UK inflation data posts a modest beat, but changes little for the BoE
UK inflation data out this morning delivered a modest beat, though it remains tracking below the BoE’s August forecasts. read more
Cooler inflation in Canada crushes the chance of a hike next week
Headline inflation in Canada fell by two tenths of a percent to 3.8% YoY, as the monthly impulse turned negative at -0.1% MoM. read more
The peak is now in for UK wage growth
Wage growth fell in August across all key measures in new data out this morning, providing welcome though widely expected relief on Threadneedle Street. read more
BoC’s Q3 surveys paint stagflationary outlook
The outlook for the Canadian economy is bleak, as per the Bank of Canada’s latest Q3 surveys. We now look towards September’s inflation report tomorrow. read more
Thirteen is unlucky for some, but maybe not the dollar
Next week, in terms of economic events, the calendar provides plenty to excite markets. read more
Monex’s October 2023 FX Forecasts
This month, growth concerns predominate across advanced economies, whilst policy easing is increasingly a focus for emerging market central banks. read more
Markets forced to trade in turbulent waters
In the coming week, increased levels of intraday volatility are likely to persist, with US political woes over the weekend, concerns over China and Friday's NFP report. read more
Canada’s economy continued to stagnate into Q3
Canada’s economy didn’t grow or shrink in July, with month-on-month growth coming in a tenth below consensus estimates. read more
Inflation data in Europe improves just as the outlook deteriorates
Inflation data in the eurozone is finally showing signs of breaking lower, to the relief of ECB policymakers. read more
Upside in USDCHF to be capped by EURUSD downside and SNB intervention
Monex's base case is for SNB intervention to result in EURCHF trading within the current 0.95-0.97 range for the remainder of this year. read more
BoE holds rates at 5.25% in “finely balanced” decision
The BoE today voted 5-4 in favour of holding rates at 5.25% as opposed to hiking a further 25bps, with Governor Bailey playing kingmaker in the decision. read more
Monex’s September 2023 FX Forecasts
Our Monex analysts continue to favour the greenback against yield (JPY) and growth sensitive (EUR and CNY) currencies over the next month. read more
Monex’s August 2023 FX Forecasts
With the risk of the Fed hiking once more in Q4 still credible, we expect the shallow and bumpy downtrend in the dollar to continue throughout Q3. read more
Expect more GBP downside on underwhelming BoE
Our analysts expect the Bank of England will hike 25bp in August following weak inflation data leading to further depreciation in the pound. read more
Monex’s July 2023 FX Forecasts
Although the global tightening cycle is approaching its final phase, monetary policy remains one of the primary drivers of FX market price action. read more
ECB forces markets to reconsider 4% terminal rate
The European Central Bank today raised all its key interest rates by 25bps, taking the deposit rate to 3.5%, the refinancing rate to 4% and the marginal lending facility rate to 4.25%. read more
Monex’s June 2023 FX Forecasts
Market price action over the past month was dominated by the twin themes of political dysfunction and economic convergence. read more
Monex’s May 2023 FX Forecasts
With central banks in the US and elsewhere hitting the end of their hiking cycles, we see near-term policy expectations losing some impact on FX volatility. read more
Monex’s April 2023 FX Forecasts
Whilst our FX Analysts' March forecasts have broadly panned out, it was the driving force behind these moves that came as a surprise to them. read more
Monex’s March 2023 FX Forecasts
Our FX analysts expect a reversal in some of February's price action on the back of reduced upside risk to US rates and potentially reduced volatility within the space. Here's a look at the latest Monex FX Forecasts for March 2023. read more
Monex’s February 2023 FX Forecasts
The market's repositioning has been quite aggressive to date, leading us to believe that the dollar is overdue a period of consolidation in the near-term. read more
Macro Outlook 2023: The macro climate remains challenging for investors
Following a volatile year defined by rising inflation pressures, the macro environment is unlikely to ease up for investors in 2023. read more
Monex’s December 2022 FX Forecasts
Our house view has now shifted tactically neutral on the US dollar in the near term and await a shift in structural factors to trigger a secular decline in the dollar. read more
Monex’s November 2022 FX Forecasts
For now, our outlook on the dollar remains constructive until jobs and inflation data allow the Fed to downshift. read more
Monex’s October 2022 FX Forecasts
Although a high level of bond market volatility is filtering through to FX markets our analysts believe the dollar has a structural basis to grind higher in Q4. read more
Week Ahead: Fire sale in markets may not ease despite thinner data calendar
In the week ahead, the economic calendar dies down slightly, although the start to the week might not be frictionless as traders return with the results of Italy’s latest election. read more
The not so “mini” UK budget
At today’s mini-budget, newly appointed Chancellor Kwasi Kwarteng announced a substantial easing of fiscal policy that awoke the bond vigilantes and sent the gilt curve substantially higher, led by the front-end. read more
Week Ahead: Deluge of central bank decisions populate next week’s calendar
In the week ahead, the data calendar is dominated by a torrent of interest rate decisions as nine major central banks prepare to adjust their monetary policy. The main event, however, will be Wednesday’s Federal Reserve decision. read more
Monex’s September 2022 FX Forecasts
Our forecasts are more bullish on the dollar as we no longer expect the Fed’s downshift to 50bps in September to be as supportive for risk conditions. read more
Monex’s August 2022 FX Forecasts
DXY index is likely to stay supported, owing to our expectation that the euro-area’s growth outlook will force another run on parity this month. read more
Monex’s July 2022 FX Forecasts
Read Monex's July 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing recession concerns and higher inflation. read more
Spooked by services inflation, the BoE doves fall back in line
The Bank of England voted 6-3 in favour of raising rates by 25bps to 1.25%. The dissenters (Haskell, Mann, and Saunders) all voted to hike rates by 50bps, in order to mitigate against risks that wage growth, firms’ pricing decisions, and inflation expectations fuel persistence in above-target inflation. read more
Monex’s June 2022 FX Forecasts
Read Monex's June 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing global growth and inflation concerns. read more
Monex’s May 2022 FX Forecasts
Read Monex's May 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid current geopolitical events and uncertain conditions. read more
CAD Outlook: Loonie strength to continue in Q2 on higher oil and BoC support
The Canadian dollar has been highly sensitive to monetary policy actions and price action in global commodities over the course of Q1. Under our base case for commodities and the Bank of Canada in Q2, which envisages two 50bp hikes, we believe gains in the Canadian dollar are likely to continue. However, our flatter forecast for the BoC policy rate in H2 will likely weigh on the loonie at the margin as the pace of Fed tightening overtakes that of the Bank of Canada. read more
Monex’s April 2022 FX Forecasts
While the limited progress in peace talks towards the end of the month blurred the overall dollar dynamics due to a positive boost to regional risk sentiment, we still expect some of the dominant drivers of FX markets from March to remain in play in April. read more
Russia-Ukraine makes central banks think twice about hikes
Risk sentiment chopped and changed throughout the week as all eyes remained on Russia-Ukraine developments. This week monetary policy decisions by the FOMC and BoE are set to show similar levels of caution to the ECB, although both central banks are still expected to hike interest rates by 25bps. read more
Euro jolts above 1.11 as ECB surprises markets with hawkish move despite war in Ukraine
Today’s European Central Bank decision came as music to the ears of EUR bulls. With the Russian invasion of Ukraine having materially changed the eurozone risk profile in a matter of weeks, the last thing markets expected was for the ECB - which is usually very cautious around its wording - to come out with a definitive announcement of a faster taper to their QE programme. read more
US inflation highest since January 1982, but markets unfazed
US headline inflation today printed at 7.9% YoY for February, up from 7.5% in January, to record the fastest pace of price growth in 40 years. Unlike in previous readings, however, the core reading was much more muted at just 0.5% MoM. read more
EUR Update: European currencies battered by latest Russia-Ukraine headlines – is there a floor?
Since the publication of our latest FX forecasts at the beginning of the month, significant developments in the Russia-Ukraine war have put increased pressure on European currencies and equities. Over the last month, the respective currencies of these nations have therefore performed even worse than the euro. The question now is; where will price action stabilise? read more
Monex’s March 2022 FX Forecasts
Geopolitical events are likely to continue driving FX markets in the near-term and with no clear end game as things stand, our forecasts remain under review. Our base case scenario at present is that the pace of geopolitical developments slow in March, but recent events result in a material deterioration in Europe’s macroeconomic backdrop and a still tentative risk environment. read more
EUR Update: Fluid backdrop to keep volatility elevated
The ongoing political risk in Europe means EURUSD is going to remain an easy target within the G10, while rising US Treasury yields the euro’s sensitivity to them will also be a risk. Looking over to H2, an improvement in global growth conditions will be more deterministic for the euro when the monetary outlook and political backdrop has become more stable. read more
Monex’s February 2022 FX Forecasts
Looking ahead, our FX analysts expect the dollar’s strength to be more nuanced in February and for it to be isolated against currencies where rates are likely to lag the rise in US rates. In our forecasts, this largely pertains to EUR, JPY and CNY. read more
BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance
As the year progresses, the Brazilian general elections that are set to be held in October will become increasingly relevant for FX markets given the real’s reputation of weakening in times of political uncertainty and upcoming elections. read more
UK economy finally recovers to above pre-pandemic levels of output
Today's release of UK GDP data for November saw economic activity more than double the consensus estimate with a print of 0.9% MoM. In addition to this, October’s monthly GDP reading was revised upwards from 0.1% to 0.2%. read more
Monex’s 12 key market themes for 2022
Trade ideas tend to have a short shelflife in today's market, so instead of issuing trade suggestions for 2022, we have opted to outline the main themes we think will dominate market price action in the coming 12 months. read more
US inflation near 40-year high, but financial markets are underwhelmed
Despite the US CPI release showed that headline inflation is sitting at its highest point since June 1982, the reaction in the Treasury market was counterintuitive and the dollar sold-off against its G10 peers. read more
US and Canadian labour market reactive
Expectations for today’s US payrolls data were high after multiple sell-side forecasters revised their projections for the net employment figure upwards following the higher ADP and Homebase data from earlier in the week. read more
FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders
It seems today's FOMC meeting minutes is one for the fixed income traders as opposed to the FX space. For FX markets, the impact of today’s meeting minutes will likely play out over the course of the week, especially as December’s jobs data is released on Friday following bumper ADP and Homebase indicators earlier in the week. read more
Monex January 2022 FX Forecasts
Looking ahead to 2022, our forecasts have been adjusted to take into account the new sensitivities of central banks to inflation, continuing virus risks and the likely slowdown in growth in Q1. Omicron risk continues to dominate as policymakers conduct a balancing act in order to mitigate the health and economic impacts. read more
Bank of Canada formalises its implicit employment goal in new inflation mandate
While today’s announcement falls in line with what economists were largely expecting and is merely a formalisation of the mandate that has been in practice since the onset of the pandemic, it is being viewed as a marginal dovish development by markets. read more
Omicroncerns clouding the monetary outlook ahead of year end
Next week’s (13th - 17th December) calendar includes nine central banks scheduled to announce their policy decisions, which means FX volatility is likely to pick up. All of which are likely to be clouded by concerns over the impact of the Omicron variant. read more
BoC and NBP to keep markets busy ahead of US CPI
Next week’s (6th - 10th November) calendar includes a BoC meeting and an NBP meeting, along with several CPI releases including the US. While the BoC is expected to hold fire on Wednesday, Thursday’s speech from BoC Deputy Governor Gravelle will be heavily watched. read more
Lower growth profile and rising US yields call for downgraded EUR calls
In November, significant downside risks to our November forecasts materialised, with growth concerns and rising US yields pushing EURUSD down from 1.16 to the 1.12 level. Growth concerns arose as some eurozone countries went into light lockdowns. read more
Projected rate paths are key for NZD and SEK
Next week (22nd - 26th November), focus remains on how markets price central bank tolerances to inflation and global growth conditions as Covid cases begin to rise and force major nations to impose tighter containment measures. read more
UK CPI, labour market data keep BoE on track for December hike
UK CPI massively outstripped expectations to print at its highest 12-month rate since December 2011, and the month-on-month change saw the pace of price increases reach a high not seen since April 1993. While today’s data exceeded the consensus estimate from economists, it is broadly in line with the BoE’s projections, which envisage CPI peaking at 5% in April 2022 when Ofgem adjusts its price cap again. read more
US CPI keeps markets volatile following the central bank bonanza
Next week (15th - 19th November), CPI remains top of mind as a number of nations are set to release reports highlighting above target price growth, however, we believe these releases will have less of an impact on broader markets relative to the US release this week. Additionally, central banks from South Africa and Turkey are expected to deliver fresh rate decisions. read more
US inflation tracks back above 6%, placing pressure on transitory messaging
With expectations for October’s CPI print to rise from 5.4% to 5.9% YoY already in play, today’s inflation release had to be big to disrupt markets beyond what had already been priced into the Treasury curve and in the FX space during the morning session. read more
ECB and Fed speakers in scope after dovish retaliation
Next week (8th - 12th November), despite the absence of any major central bank meetings, the focus will remain on monetary policy pricing, especially as the Fed’s media blackout period ends. Notable speeches from Chicago Fed Evans and San Francisco’s Daly will be in scope for US rate traders, while opening remarks from the ECB’s Chief Economist Lane will be top of mind for euro money markets. read more
Strong payrolls keep US front-end yields firm, boosting the dollar
Amid the dovish pushback from G10 central banks this week and the broad rally in bond markets, front-end US Treasury yields have remained fairly resilient. This theme was extended in early trading today, helping the dollar gain ground ahead of October’s payroll data. While Canada’s net employment change undershot expectations by 10.4k with a print of 31.2k, today's LFS largely met our expectations. read more
Bank of England bats back market expectations, sends sterling plummeting
The Bank of England today shocked markets by voting 7-2 to hold rates at 0.1% while voting 6-3 to maintain the current stock of assets at £875bn. While we largely expected the Bank to hit back against aggressive market pricing of rate hikes by holding rates, we anticipated a tighter split in the vote in order to signal to markets that tighter policy was imminent at December’s meeting. read more
Time to taper, but that is all from the Fed for now
The Federal Reserve largely met the market consensus today by announcing plans to taper its QE programme by a maximum of $15bn per month until year-end. Powell opened the door further to give policymakers greater optionality going forward. read more
The central bank magic trick: turning a dove into a hawk in plain sight
Price action in G10 FX markets this week has been driven predominantly by pricing in bond markets and the actions of central banks. This dynamic is set to continue next week (1st - 5th November) as the battle against rising inflation migrates from the Bank of Canada and the ECB to the Reserve Bank of Australia, the Federal Reserve, and the Bank of England. read more
ECB meeting: Inflation, inflation, inflation
Despite the suppressed expectations, the ECB managed to dull the event down even further by adjusting their opening statement such that it indicates the decision would not include an assessment of the economic outlook. The lack of excitement was visible across markets, as EURUSD remained unfazed after the release of the initial rate statement. read more
Bank of Canada ends QE and emboldens hawkish market pricing
The Bank of Canada today announced that it would taper its QE programme by a further C$1bn a week, therefore entering the reinvestment stage, while it also brought forward its forecast for the output gap closing from H2 2022 to “the middle quarters” of next year. read more
Central banks to take centre stage ahead of crucial GDP readings
A flurry of central bank meetings take will place across the globe next week (25th - 29th October), while Q3 GDP prints from the US and eurozone will take centre stage on Friday. Several countries will also release inflation readings. Among the central bank meetings are the Bank of Canada, the Bank of Japan and the European Central Bank - in order of importance. read more
EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier
While September’s losses were significant at over 2%, we expect the pressure on the euro to ease over the coming months as supply pressures mitigate, which should help to cool inflation and aid growth conditions. We expect the combination of these developments to be supportive for EURUSD. read more
Economic activity and inflation data put stagflation fears to the test
Next week (18th - 22nd October), the data calendar revolves around October’s preliminary PMI prints, while China’s Q3 GDP data also scans as one of the more interesting releases. The focus on activity data is likely to be heightened given growth concerns over previous weeks and the impact higher input costs are having. This is especially the case in the eurozone, UK, and China, where rising energy costs are the most pronounced. read more
USD Update: Defiant dollar in Q4
Amid the global backdrop of lower growth and higher inflation, the dollar is likely to stay well bid in Q4. However, our latest forecasts now see the DXY index trading a percentage point lower than current spot levels and back towards highs of its previous trading range as the aggressive repricing in FX markets overextended in early October given our views on back-end US rates this year. read more
Big miss in ZEW fails to dent EURUSD as G10 yields moderate
Today’s miss in the German ZEW data highlights how German activity is struggling to expand at the start of Q4 as current conditions are no longer improving. The current situation gauge tumbled from 31.9 in September to 21.6 in October, well below expectations of 28.5. EURUSD escaped the lack of optimism spilling into FX markets despite the big miss in today’s ZEW data, as at the same time yields in G10 markets have been moderating today after yesterday’s dramatic climb higher. read more
Macro backdrop of slower growth and rising inflation set to dominate FX markets
Next week (11th - 15th October), with a limited data calendar, markets are likely to continue focusing on the inflation backdrop and the impact it will have on growth conditions. We take a brief look at the environment in Europe this week and what it means for ECB and BoE pricing. read more
Diverging labour reports play out in North America
It was our expectation that today’s Canadian and US labour market reports would show a stark divergence, not only in net employment but also in underlying metrics. This ultimately played out, with the US jobs market adding 194k jobs in September compared with expectations of a 500k increase, while Canada added 157.1k jobs relative to expectations of just a 60k net employment gain. read more
Grappling with the stagflationary backdrop
Next week (27th September - 1st October), the focus shifts from policy announcements to individual central bankers. The RBA, RBNZ and NBP will have to announce their policy decisions given the latest downturn in the global economic outlook, while on the data front, US and Canadian labour market data stands out. read more
From policy announcements to central bank speakers
Next week (27th September - 1st October), the focus quickly shifts from policy announcements to individual central bankers as a swathe of speakers fill the economic calendar, largely due to the ECB’s forum on central banking taking place between the 28th and 29th of September. Rather than being in Sintra (Portugal) as has been customary, the event will take place online. read more
Bank of England delivers hawkish surprise, even by the markets standard
The Bank of England today voted unanimously to keep the Bank Rate at 0.1%, while members voted 7-2 in favour of continuing with its existing QE programme. The shift in the QE vote, from 7-1 to 7-2 due to Ramsden joining Saunders in dissenting, set the tone for what was to be a hawkish set of meeting minutes despite their Q3 GDP projection being downgraded by around a percentage point. read more
Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot
For those looking for an explosive Fed meeting, they may have initially been disappointed by the alterations in the dot plot. However, Powell’s comments meant volatility wasn’t absent in the FX space, with the likes of EURUSD swinging within a 0.55% range and USDJPY climbing over half a per cent higher on the day. read more
Central bank bonanza
The 20th - 24th September is packed with central bank meetings, with the FOMC’s decision on Wednesday eyed as the most important economic event by markets. On top of that, the Bank of England is set to release their latest policy decision, while the Norges Bank is expected to be the first G10 central bank to raise rates since the pandemic. read more
Inflation to sit top of mind next week
Next week’s data calendar focuses heavily on inflation data in major developed market economies, while core CPI readings from Poland and inflation expectations data in Turkey will be viewed amid historically high CPI readings. read more
Central banks set to stretch hawkish wings
Next week, price action in US fixed income markets will continue to garner a lot of market attention, while increasingly hawkish central bank developments will also be in scope. Of note is the Reserve Bank of Australia, who we expect to press on with tapering their QE programme, the Bank of Russia who are expected to hike by 50bps, the National Bank of Poland who will battle with record high inflation, and the European Central Bank. read more
Focus shifts from Jackson Hole to US jobs data
In the week beginning Monday 30th August, the market’s emphasis shifts to monitoring the severity of the latest Covid-19 waves driven by the delta variant, the economic impact they are having via timely data points, and August’s Nonfarm Payrolls data next week. Fixed income and money markets will be taking their cues from the latest payroll data in order to price expectations of September’s Fed meeting. read more
Jackson Hole arrives after a volatile week for macro conditions
With a tentative macroeconomic backdrop, next week’s data is likely to have a larger market impact than usual, especially with the quantity of preliminary PMI releases for August. The Fed’s annual Jackson Hole symposium should provide markets with a bit more clarity as to its tapering timeline. read more
One week closer to Jackson Hole
Markets are likely to settle somewhat as they await the headlines from the Jackson Hole symposium on August 27th. Next week’s calendar suggests there may be pockets of isolated volatility with policy decisions from both the Reserve Bank of New Zealand and the Norges Bank, while the Reserve Bank of Australia and Federal Reserve both publish meeting minutes. read more
To hike or not to hike, that is the question
Markets this week have largely focused on underlying growth conditions, FOMC speakers and Friday’s labour market data, with US bond markets sending conflicting signals to FX traders. Next week (9th – 13th August), the key pieces of data centre around rate decisions from Banxico and the CBRT, both of which have reasons to hike rates due to rising inflation but also have grounds to stay pat. read more
Canadian employment underperforms, but it isn’t all bad
July’s employment data out of Canada saw the economy add 94,000 jobs. While on the surface, the slip looks seismic, the nature of the job additions and the stage in which the Canadian labour market recovery is at means the underperformance of the net employment data isn’t as concerning as the headline suggests. read more
Bank of England in focus after inflation overshoots and labour market progress
Next week, the focus will be on the Bank of England to announce its policy decision and comment on the recent inflation overshoots and recovery in the labour market. read more
Q2 GDP data and the Fed are in focus amid a global third wave
Markets will pay close attention to commentary by Chair Powell and the Fed’s assessment of current conditions. A first glance at economic performance in advanced economies in Q2 is also pinned for the week, although growing fears over the coming months might cloud the impact positive GDP figures have on markets. read more
ECB guidance to take centre stage next week, CBR set to hike rates
The ECB takes centre stage next week, with a revamped strategy review setting the tone for a persistently more dovish course of action in the months to come, while the CBR is set to hike rates further amid a light data calendar. read more
Central banks in focus next week after Fed’s hawkish shift
Next week will be critical to assessing the way forward as a fresh batch of inflation data is released and several central banks face the press cameras. On the side, political developments might add excitement to markets. read more
Monetary policy in scope with FOMC minutes and ECB strategy review
This week (5th - 9th July), the meeting minutes from the Fed’s June meeting will be scoured by market participants as they try to gain a clearer view on future US interest rates, and the ECB’s Governing Council is set to also meet next week in Frankfurt to discuss the ongoing policy review. read more
First Nonfarm Payrolls since Fed may cause significant volatility
Last week, volatility in FX markets was largely driven by the hawkish shift by the FOMC, as broad dollar moves drove price action in G10 currency pairs. This week, the focus remains largely on the US, with the release of the first Nonfarm Payrolls report since last week’s Fed meeting. read more
Markets to tune into FOMC speakers after the Fed’s hawkish shift
The focus next week will now be on US data and whether that can live up to the expectations set by the Federal Reserve, while a few FOMC speakers will provide markets with a bit more clarity on their position on the economic outlook. read more
A week of central bank decisions but the Fed will draw most of the focus
The Federal Reserve, Central Bank of the Republic of Turkey, and the Central Bank of Brazil are likely to be the most exciting on this week's agenda. Over the weekend, events in the UK will focussed on the government’s decision to stick to its June 21st reopening plan as cases of the delta variant rise. read more
It is all about PEPP
Looking ahead, central banks will come back to the fore next week with the European Central Bank, the Bank of Canada, and the Bank of Russia releasing their latest policy decisions. The ECB is likely to steal the show as speculation over the next PEPP decision rises. read more
All eyes on US and Canada labour market data after underwhelming April reports
Next week (31st - 4th June), the focus turns to labour market data from the US and Canada after April’s underwhelming reports. Also on the agenda are policy decisions from the RBA and Reserve Bank of India and China’s official manufacturing PMI. read more
Limited top-tier economic data puts USD dynamics further into focus
Next week (24th - 28th May), the economic calendar is light on major market-moving events. US PCE inflation stands out as the most high profile data point on the calendar along with the latest RBNZ rate decision, while the focus will remain on central bank speakers. read more
European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation
We continue to track the evolution of the vaccine rollout in major economies, as a timely gauge of potential reopening and global economic recovery. In this edition, we highlight the European efforts to catch up with front-runners like the UK and US, while stressing the dire picture in some emerging markets. read more
A post Brexit Britain leaves sterling at the mercy of Covid-19 developments
The stale nature of Brexit developments over the course of Q4 means it has been some time since our last GDP outlook. In the latter stage of 2020, despite Covid-19 developments, the pound continued to trade based off no-deal Brexit risk as the clock wound down and negotiations stalled. read more
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