At Any Rate Global FX: Historic trade deals and take-aways for currencies
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May 9, 2025 In this insightful discussion, Arindam Sandilya, Co-head of FX Strategy at JPMorgan, shares his expertise on the evolving Asian FX market and highlights the effects of recent volatility. Patrick Locke, Global FX Strategist at JPMorgan, explores the implications of the US-UK trade deal, emphasizing its limited impact on the British pound. Together, they navigate the intricacies of currency dynamics, central bank policies, and trade negotiations, providing a captivating glimpse into the future of global currencies.
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Dollar Asia Structural Shift
- The recent multi-sigma moves in dollar Taiwan sparked speculation about a currency accord causing a structural downtrend in dollar Asia.
- Key uncertainties remain about Asian real money managers, exporters' FX conversion behavior, and central banks' intervention strategies.
Euro Dollar: U.S. Pessimism Key
- The euro dollar constructive view is less about euro optimism and more about U.S. pessimism catching up to the rest of the world.
- European equity performance and U.S. hard data alignment are key factors to watch for sustaining this view.
Central Banks Impact on Currencies
- The Riksbank signaled a dovish pivot while Norges Bank remained steady, maintaining a bullish bias on Scandinavian currencies versus the euro.
- The Bank of England’s balanced tone leaves room for potential easing tied to economic data, impacting sterling's relative strength.