At Any Rate Global FX: The dollar, ECB, Treasury manipulator report and the 2H’25 outlook for EM FX
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Jun 6, 2025 Analysts break down the latest U.S. economic data, revealing signs of slowing growth and its impact on the dollar. The discussion highlights Ireland and Switzerland as key players in the currency manipulator report, suggesting potential tariff implications. A positive outlook for the Euro emerges as the ECB hints at ending its easing cycle, while global shifts in currency dynamics see emerging market currencies gaining strength against safe havens. Attention turns to the Australian dollar and Norwegian krone, emphasizing a selective investment strategy in a changing economic landscape.
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Bearish Dollar Due to US Growth
- The dollar bearish view is based on US growth catching down to the rest of the world and structural policy breaks in the US.
- This justifies a discount on the dollar as the world is long US assets.
US Data Moderation Evident
- US data shows continued moderation, particularly in labor markets, but no strong break or dislocation yet.
- ISM services reaffirm slowdown with a 49 reading, indicating a soft second half is expected.
Currency Manipulator Report Highlights
- The US Treasury's currency manipulator report found no manipulators but added Ireland and Switzerland to monitoring.
- Future penalties could include tariffs, signaling a harder stance ahead.