At Any Rate Global FX: The weak dollar view passes a flow test
Aug 22, 2025
Ben Jarman, a Global Economics, Rates & FX Strategist at J.P. Morgan, offers valuable insights on the dollar's current performance and the impact of unexpected central bank decisions on growth and inflation. He discusses New Zealand's dovish monetary policy and its effects on the Kiwi dollar. The conversation dives into dollar inflows into U.S. assets, highlighting their significance against a backdrop of declining dollar strength. Additionally, Jarman analyzes capital flows and economic indicators in the UK, revealing investor sentiment in response to fiscal changes.
AI Snips
Chapters
Transcript
Episode notes
Bear Trend Has Healthier Underpinnings
- The podcast argues the dollar's bear trend is structurally healthier despite short-term consolidation after Q2's decline.
- Cleaner positions and lower U.S. real yields set the stage for renewed dollar weakness as Fed cuts begin.
Growth Alone Won't Rescue The Dollar
- Stronger U.S. growth alone won't guarantee dollar strength because global growth revisions and inflation dynamics matter.
- High-growth, easy-money mixes can boost local equities but often weaken currencies via real yields and term premium.
Flows Alone Didn't Save The Dollar
- Large foreign purchases of US equities in June didn't stop a substantial dollar fall, weakening the case that flows alone will sustain dollar strength.
- The burden of proof falls on those who expect dollar gains despite poor positioning and subdued follow-through.