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At the moment, the key theme in currencies is an improvement in risk sentiment and an appreciation in high-risk currencies, at the expense of lower-risk ones, such as the US dollar. The USD index has hit a June 2022 low and has fallen more than 10% since October, as the Federal Reserve slows its hiking cycle and global recession fears abate. Among the better performers, currencies closely linked to China have been doing well. In the G10, the Australian dollar has been doing particularly well. Among emerging market currencies, some Asian currencies, notably the Thai baht, have seen a strong performance. The Brazilian real and Chilean peso in Latin America, which rely heavily on China's demand, are also outperforming. Later in this podcast, we will delve into China's reopening and examine the winners and losers of that development.We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
What can we expect this year? The narrative in 2022 was much about central bank responses to rising inflation rates. Will that remain the case this year? Or will these central banks begin calling time on their tightening cycles. And what about the global economy? Are recession indeed on the way? Or will we just see modest downturns in growth? In summary: what are the main themes to look out for in currencies in 2023? Our Market Analysts will tell you everything about it. We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
China finally signs of an easing in its zero-Covid policy. It boosted the CNY and risk currencies against the USD. We see an improvement in risk sentiment and also signs of a downtrend of US inflation. We also are noticing growing expectation among investors for a dovish pivot during the Fed meeting next week. We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
If you’re following financial markets at the moment, there really is very little chance to catch your breath. Since our last episode, the market sentiment has improved and investors dialed back expectations for US rate hikes, weighed significantly on the dollar. Meanwhile, the October US inflation report is much softer than expected. The big question is: What does that mean for the US dollar? We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
According to the BoE, further increases in interest rates may be required to bring inflation back down to target, but the bank stated that the peak in rates would be '‘lower than priced into financial markets''.On the UK economy, the BoE once again struck a sombre note. In its statement, the MPC spoke of a ‘very challenging’ outlook for the UK economy, mentioning the tightening in financial conditions since August. The committee also warned that the economy may already be in recession, and that this could last until the middle of 2024, which would be the longest recession since records began.We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
Last time we spoke about the reaction in the pound to the budget and the potential impact of the tax cuts on the economy. Since then, we have seen one of the most dramatic U-turns in British political history. Most of the tax cuts (around 80%) that were announced have now been reversed. How have markets reacted? Sterling posted decent gains and UK bond yields have stabilized. Big question for us: What’s next for the pound? Is this U-turn a green light to a sterling rally, or do downside risks remain? We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps!
What are the economic consequences of the mini-budget? Since the initial sell-off, the GBP has recovered in the past few sessions. What are the reasons for the recovery in the pound? We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Liked this show? Please leave us a review here – even one sentence helps! 
We'd like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  Since our last episode, the US dollar has rallied against almost every other G10 currency, with the sole exception of the Swiss franc, which has benefitted from the hawkish turn from the Swiss National Bank. The main theme in markets has been one of risk aversion, as investors and economists pencil in weaker global growth during the remainder of 2022 and into next year. Liked this show? Please leave us a review here – even one sentence helps!
We’de like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk The main talking point has been the move below parity in EUR/USD for the first time since December 2002. The pair teetered on the brink of parity for a couple of sessions, before falling fairly comfortably below it on Thursday. A divergence in natural gas prices across the Atlantic was largely to blame for the move, with last week’s hotter-than-expected US inflation report enough to drive the pair through the key psychological level. We have, however, seen a recovery in the euro since then, with EUR/USD moving back above the 1.02 level on rising bets in favour of a 50 basis point interest rate hike from the European Central Bank when it meets on Thursday. Upcoming webinars: - Tech in finance Read our latest blog Liked this show? Please leave us a review here – even one sentence helps! 
Time flies when you’re having fun. So, this is a good chance for us to look back on the first six months of the year, and talk about our main highlights in the FX market so far this year. We then look ahead, and talk about what we expect during the remainder of 2022.
The Swiss franc was the best performing currency in the G10 last week after the SNB shocked markets by announcing a 50 basis point interest rate hike - the consensus was for no change. The bank also changed its wording on the franc, no longer calling it ‘highly valued’ and saying that it would be prepared to intervene in the market on both sides.
Markets will have one eye on next Wednesday's FOMC meeting. The Fed is set to raise rates by another 50 basis points next week and signal more hikes are coming at upcoming meetings. This will be followed by the Bank of England’s latest policy decision on Thursday. But we’re going to focus first on Thursday’s ECB announcement, which delivered a long awaited hawkish pivot. In the bank’s statement, it explicitly said that it would raise interest rates by 25 basis points at its July meeting, and follow this up with another one in September.
On the whole, most economies rebounded well from the COVID induced slowdowns in 2021, as an easing in restrictions allowed for an unleashing in pent-up demand. While the strict covid restrictions are a thing of the past for most of us, a number of other downside risks to growth have materialized of late, causing markets and central bankers to fret that a slowdown could be on the cards during the remainder of the year.
We spoke on our last episode about the sharp sell-off witnessed in risk assets in late-April, which sent most higher risk currencies lower against the safe-havens, notably the US dollar. The US dollar index, which measures the currency against a weighted basket of its peers, rose to its strongest position in almost 20 years earlier in the week, as heightened global growth concerns triggered a ‘risk off’ mode in markets. The dollar has also continued to be well supported by expectations for higher US interest rates. At its FOMC meeting last week, the Federal Reserve raised rates by 50 basis points, as expected, the largest such move in more than two decades. The communications from chair Powell were again hawkish. He called the US labour market ‘very, very strong’, while once again saying that inflation remained ‘unacceptably high’.
In FX, we’ve seen a classic period of ‘risk off’ trading. The US dollar has been by far and away the best performing currency, rallying sharply against pretty much everything else. Most emerging market currencies are down, with the exception of the Russian ruble, some more than 4 or 5% in the past week alone.The major currencies have also suffered rather extraordinary sell-offs, in most cases to multi-month or multi-year lows. Two of the most notable examples, and the two currencies that we’ll focus largely on today, are the pound and the euro. EUR/USD has collapsed to its lowest level in more than 5 years, and was trading below the 1.05 level this morning. Sterling, meanwhile, is trading at its lowest level since July 2020, having now sold-off by more than 4% in a little under a week. 
For the most part in the last month, we’ve seen an improvement in risk sentiment - the safe-havens have generally underperformed, notably the Japanese yen, which has slumped to around its lowest level at any time since I started working in the FX industry, and at the release of this recording may well have fallen to its lowest level since 2002. The higher risk currencies have generally rebounded, notably the Australian dollar and Norwegian krone in the G10, while among emerging markets: the Brazilian real, South African rand and (notably) the Russia ruble have led the rebound.
Investors were caught wrong-footed by news of the full-scale invasion last Thursday, despite a host of warnings, with markets holding onto misplaced optimism that a peaceful solution could be found that would avoid conflict.In FX, almost all emerging market currencies sold-off, most rather sharply, albeit there were some exceptions (notably those in Asia, including CNY). European currencies in general have underperformed, given their proximity to the conflict and close economic ties with Russia and Ukraine.
Last week was a very eventful one of central bank announcements, with the Bank of England also holding its February monetary policy meeting on Thursday. As expected, interest rates were raised by a quarter of a percent to 0.5%, the first back to back rate increase in the UK since 2004, after rates were of course raised by 10 basis points back in December.The euro has been one of the best performing G10 currencies in the past seven days, alongside the Swedish krona. The common currency rallied by more than one percent versus the US dollar last Thursday to back above the 1.14 level after ECB President Christine Lagarde struck a hawkish tone during the bank’s press conference. 
So far in 2022, we have seen a broad rebound in most of these EM currencies, many in excess of 3% in less than 3 weeks - including the Brazilian real, South African rand and Hungarian forint. Now, while part of this recovery has to do with the broad weakness we’ve seen in the US dollar, we’ve also seen a general rebound in risk appetite, which has helped support these higher risk currencies.The US dollar has depreciated against most of its peers so far this year. The dollar is currently trading as the worst performer in the G10 year-to-date, followed closely by the Australian and New Zealand dollars. 
The main talking point in recent months has undoubtedly been the recent sharp increase in global inflation, driven largely by an unleashing of pent up demand and acute supply shortages. Price growth has continued to far exceed expectations of both central bankers and economists. Citibank’s G10 Inflation Surprise index, for instance, rose to a fresh record high in December. The detection and aggressive spread of the omicron variant of COVID-19 has triggered a few jitters among market participants. A number of countries, particularly in Europe, have tightened restrictions over the holiday period, which has raised a few concerns over global growth. The likes of Germany and Portugal have introduced post-Christmas curbs, while the Netherlands remains under a fairly strict lockdown. 
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