Dollar Drift With Yield Shock, Yen Breaks Tradition.There was no single, dominant theme in currency markets last week. Instead, price action reflected a mix of cross-asset divergences.
Week Ahead: SCOTUS Decision on Tariffs? 8 Fed Officials Speak as the Market Discounts almost 65 bp of Cuts this Year.Last week began with the LDP's stunning victory in Japan. However, rather than sell-off as the market expected, the yen and JGBs rallied.
Pound Sterling Next Week: 3.0% Inflation Call to Test BoE Outlook.Pound Sterling closed firmer at the end of last week, with GBP/EUR near 1.1500 and GBP/USD around 1.3650 as markets look ahead to next week's UK inflation release. Latest — Exchange Rates:Pound to Euro (GBP/EUR): 1.15049Pound to Dollar (GBP/USD): 1.36551Euro to Dollar (EUR/USD): 1.18689 UK economists at Pantheon Macroeconomics.
USD/JPY Weekly Forecast: Fragile footing as carry unwind risks grow.USD/JPY starts the week on unstable footing as strengthening yen flows, fragile risk sentiment and rising pressure on carry positions collide. With traditional macro drivers offering only limited clarity, traders may need to look elsewhere for direction.
International Week Ahead: Growth Rebound to Keep BoJ Hikes in Play.While both we and consensus expect a rebound in Q4-2025 following the quarter-over-quarter annualized 2.3% contraction in Q3, we forecast a milder recovery of 1.2% versus 1.6% for consensus. The contraction in Q3 was driven largely by weaker net exports after shipments were pulled forward into Q2 ahead of anticipated U.S. tariffs.