Download the August global FX outlook now
July has been a whirlwind for the FX markets, driven by significant political events and economic shifts. Key developments included election outcomes in the UK and France, an assassination attempt on former US President Trump, President Biden’s withdrawal from the 2024 election, and Kamala Harris stepping in as the presumptive Democratic candidate.
Financial markets reacted sharply, with the US S&P 500 and Nasdaq experiencing their largest single-day losses since 2022. The USD/JPY pair, heavily linked to tech stocks and speculative trade, fell 6.1% in July after a strong start to the year. Inflation remains moderate, prompting investors to anticipate interest rate cuts from major central banks despite potential risks from goods reflation and supply chain issues.
Factor political uncertainty into your plans
The political focus has shifted from Europe back to the United States, where volatility premia has mostly normalized but the Harris vs. Trump face-off comes with a lot of new uncertainties. The lack of clarity on Harris’ view on the US dollar and contradictions in Trump’s policy recommendations means a clear directional FX forecast is hard to make.
Currency volatility and political uncertainty tend to rise going into the presidential election in November. Download our comprehensive currency market outlook for a deeper analysis of the month ahead to help prepare your business for FX risk.
You can also watch our Lead FX Strategist, George Vessey, give an overview of the August Global FX Outlook below.
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