Monex’s August 2024 FX Forecasts

After bursting onto the scene at the end of Q2, political risks have continued to play a central role for FX markets over the past month. In part this reflects the unusual concentration of political events, with a number of elections occurring in a short space of time, some expected others not. But as we see it, the attention paid to political developments also reflected the lack of other significant themes for markets to trade. While monetary policy and growth both remain on the radar for traders, broadly speaking, neither proved a durable theme for currency markets through most of July. The end of the month and beginning of August, however, has seen a notable reversal of this dynamic. A carry unwind following BoJ tightening, US growth fears and escalating tensions in the Middle East have all combined in a perfect storm to see a notable uptick in market volatility. We think this is a flash in the pan, but the persistence of this as a theme is likely to be key for how FX markets trade over the next month.

You can read our August 2024 FX Forecasts report here:

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Authors:

Nick Rees, FX Market Analyst

María Marcos, FX Market Analyst

Disclaimer

This information has been prepared by Monex Europe Holdings Limited, part of Monex S.A.P.I. de C.V. (“Monex”). The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. All entities in the “Monex” group of companies are regulated for different products and services within the jurisdictions in which they operate. Details of the different entities can be found here. Details of the respective entities’ regulated status and available products and services can then be found on the relevant links to the individual jurisdictions’ website.