At Any Rate Global FX: Sailing the USD Bearish Ship in Murky Waters
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Oct 17, 2025 The discussion kicks off with the implications of the US government shutdown on dollar visibility and Fed clarity. Global growth indicators reveal mixed signals, with developed markets showing weakness while emerging markets hold steady. Tensions in US-China relations are explored, highlighting their impact on regional currencies. Surprising labor data from Australia and New Zealand prompts a look into upcoming policy reactions. Insights from the recent IMF and World Bank meetings shed light on dollar positioning and policy risks.
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Data Vacuum Amplifies Dollar Uncertainty
- The US government shutdown removes payroll data and leaves markets flying blind on Fed direction.
- Longer shutdowns build headwinds for the dollar but keep investor conviction low.
Dollar Bearishness Amid Softening DM Momentum
- JPMorgan maintains a dollar-bearish view despite near-term uncertainty from missing US data.
- Growth indicators outside the US remain pro-cyclical but have lost intensity recently, especially in DM.
DM Surprise Dip Threatens Euro Narrative
- DM economic activity surprise indices have dipped into negative territory while EM holds up better.
- Prolonged negative DM surprises could weaken the euro-dollar bullish narrative.