Topic: Weekly FX Report

Markets stay in risk-on mode despite Middle East tensions and volatile energy prices. Softer US inflation has eased Fed pressure, supporting carry trades, while the dollar remains rangebound and investors focus on upcoming UK data.

Markets turned risk-on as hopes for a Hormuz shipping breakthrough eased oil supply fears. Weaker US payrolls tempered Fed hike expectations, while resilient growth signals, record equities, and dollar uncertainty kept FX markets on edge.

Markets delivered no shortage of drama this week: tentative Gaza deal hopes, a tech-led rebound, sharp yen swings, mixed central bank signals and a stronger euro kept investors navigating volatile global currency and equity markets.

Oil above $100, renewed tariff risks and shifting rate expectations have lifted demand for the US dollar, leaving markets focused on central banks, inflation and the outlook for global growth.

Cooling US inflation has eased immediate market concerns, but rising oil prices and escalating US-Iran tensions are keeping investors cautious. With growth holding firm and volatility low, markets remain stuck in a higher-for-longer, low-conviction environment.

Rising Middle East tensions sent oil prices and bond yields higher, reviving rate hike expectations on both sides of the Atlantic. Despite growing geopolitical and inflation concerns, currency markets remained relatively calm, supporting higher-yielding currencies.