At Any Rate Global FX Outlook 2026: Bearish USD, Bullish Beta
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Nov 28, 2025 Join Arindam Sandilya, an expert in Asian FX flows, as he unpacks regional policy preferences and the seasonal strength of CNY. Antonin Delair, an FX macro-quant strategist, discusses the impact of quieter central bank activity on market signals and factor performance. Patrick Locke tackles US trade policies, tariffs, and their implications for the FX landscape, particularly in relation to Canada. Expect insights on the interplay between currencies and global economic dynamics.
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Bearish Dollar, Narrower Downside
- The team is bearish on the dollar into 2026 but expects smaller, narrower declines than in 2025 unless US data weakens.
- EuroUSD upside is seen as asymmetric to Fed pricing, strengthening more when Fed terminal rates fall and sticky when they rise.
Japan's Fiscal Shift Weakens The Yen
- Japan's fiscal expansion under the Takaichi administration has surprised markets and increased inflation and yen depreciation risks.
- Standard BOJ rate hikes or FX intervention may be less effective now, implying more structural yen weakness and a likely test above JPY160.
Use Antipodeans As Cyclical Carry Plays
- Consider long AUD and NZD as high-beta, high-yield cyclical plays while monitoring commodity downside and Kiwi funding stresses.
- Watch iron ore supply in late 2026 and NZD funding shorts as potential risk triggers.