At Any Rate Global FX: What has and hasn’t changed in FX after a volatile week
Apr 11, 2025
Arindam Sandilya, Co-head of Global FX Strategy at J.P. Morgan, offers insights into the recent turbulence in currency markets. He discusses the rise of the Eurodollar to a three-year high and its implications for the U.S. dollar's strength. The conversation shifts to complexities in U.S.-China trade relations and the evolving perceptions of U.S. assets. Arindam also navigates the dollar's performance against emerging markets and explores its long-term status as a safe haven amidst ongoing economic volatility.
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Market Volatility and Dollar Surge
- Currency markets remain volatile, with large swings in cross-yen, cross-Swiss, and Eurodollar.
- The dollar's recent surge is occurring alongside fragile interest rates.
Trade Conflict Outlook
- The intensity of the trade conflict has likely peaked, with negotiated deals expected.
- Chronic headwinds remain, impacting the US cyclical outlook and global trade.
Dollar Weakness Analysis
- The dollar's weakness resembles emerging market characteristics with simultaneous sell-offs in currency, equity, and bond markets.
- This dynamic is primarily cyclical deleveraging, not a structural loss of safe-haven status.