Monex’s June 2022 FX Forecasts

Last month was a tale of two halves for FX markets. At the start of May, the cross-asset tone was decisively risk-off as markets focused heavily on the need for a more aggressive tightening cycle from the Fed in order to temper inflation pressures. The mixture of higher US rates and lower external growth conditions weighed further on US equities, which in turn called the tune for risk sentiment in FX markets and boosted the dollar. Then, a string of soft US data, especially in relation to the US housing market, changed the tune for risk assets as US rates markets started to price a lower peak in the Fed’s hiking cycle. Looking ahead, we expect conditions in FX markets to remain highly volatile as incoming data adds to the inflation puzzle. In the near-term, we expect global growth concerns and hawkish Fed messaging to keep the dollar well supported before a more structural depreciation in the broad dollar occurs over the medium-term.

You can read our June 2022 FX Forecasts report here:

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Authors:

Simon Harvey, Head of FX Analysis

Jay Zhao-Murray, FX Market Analyst

Disclaimer

This information has been prepared by Monex Canada Inc., an execution-only service provider. 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. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.