Fed minutes were hawkish surprise. Is this going to provide support to USD?
Joumanna Bercetche
Perisha S.
Significant number on committee view it's time to shift to more symmetrical bias between hikes and cuts. Consistent with view Fed will keep rates on hold for long time.
Perisha S.
Hawkishness is one element for dollar support, but Supreme Court ruling on tariffs could catalyze dollar weakness if deemed illegal - raises concerns about tariff revenues and US fiscal position.
Most likely trajectory for dollar-yen?
Joumanna Bercetche
Perisha S.
Fiscal concerns in Japan and BOJ slow to normalize policy will underpin weaker yen. Trajectory higher for dollar-yen, forecast around 160 by year-end, but move likely to be grind up due to intervention risks.
Where is positioning starkest - developed or emerging markets?
Joumanna Bercetche
Perisha S.
Broad-based but standout currencies: G10 - long Aussie and Scandies; EM - higher yielders as investors seek carry. More risk premium baked into DM space vs EM.
Cautious on sterling trajectory given political noise?
Joumanna Bercetche
Perisha S.
Yes, political uncertainty with Starmer's position hanging in balance. Risk of more leftward movement if he leaves. Bearish on pound, see euro-sterling reaching 92 this year.