Today's Currencies Pulse
Rupee flat on hopes West Asia truce will hold
The Indian rupee held steady as markets priced in hopes that a West Asia truce would hold, hovering near ₹95.78 per dollar after slipping 8 paise in early trade. Traders kept a close eye on geopolitical developments while the currency remained largely unchanged.
China to Allow More Banks to Handle Digital Yuan: Sources
China's central bank will add twelve new banks to the e‑CNY programme, expanding the roster from ten to twenty‑two institutions. The new participants include major joint‑stock banks such as China Everbright and city commercial banks like Bank of Ningbo. The move seeks to accelerate digital yuan adoption, especially for cross‑border payments that bypass the US‑dollar‑centric system. Since its 2019 launch, e‑CNY transactions have amassed a cumulative value of 16.7 trillion yuan, highlighting growing domestic usage.
Our Underappreciated International Reserve System
The latest NBER paper shows a pronounced shift in the composition of global foreign‑exchange reserves. The U.S. dollar’s share slipped below 57% in Q3 2025, while gold overtook the euro to become the second‑largest reserve asset. Central banks are diversifying into...
TACO Plans Falter Without Open Hormuz, Market Pressure
Third attempt at TACO this week (one early in the week by Trump, one Thursday by Netanyahu - was that a NACHO?) Both of those failed because Iran and the bond market both get a say. This TACO attempt and all...
Central Banking for Open Economies in a Changed World
The Peterson Institute for International Economics convened a high‑level panel of central bank governors from New Zealand, Spain, Korea and Switzerland to examine open‑economy monetary policy in a rapidly shifting financial and geopolitical climate. Moderated by former Bank of Ireland governor...
Next Week’s Menu: March 21-27, 2026
The week of March 21‑27, 2026 features a sparse calendar of central‑bank meetings but a flurry of high‑profile speeches from Fed Chair Powell, BoE’s Taylor and Greene, and several ECB officials, fueling speculation of rate hikes later in the year. A slate...
Gold Slides for Third Straight Week as Dollar Gains Amid Middle East Tensions
Gold prices fell for a third week in a row, extending a 16% decline since January, as the U.S. dollar index rose on heightened Middle East tensions and soaring oil. Analysts say the move reflects a shift from safe‑haven demand...
Markets Raise Bets on Bank of Canada Hikes as Oil Fears Mount
Markets are pricing a more aggressive Bank of Canada tightening path, with traders betting on a cumulative 75 basis‑point increase by 2026 and a 25‑basis‑point hike as early as July. The central bank held its policy rate at 2.25% and...
USDCAD Sellers Had Their Shot. They Missed. What Now Technically for the USDCAD Traders?
USDCAD opened near the month’s high of 1.3752 but could not sustain a breakout above the recent peak of 1.37476, sending the pair back toward the 100‑hour moving average at 1.37086. Sellers briefly pushed the price below this level to...
War Boosts Dollar Short-Term, Undermines Long-Term Dominance
The current FX conundrum perfectly summed up by @EpsilonTheory The war is bullish USD until it isn't. "A paradox is emerging in which the war simultaneously strengthens the dollar's short-term position through traditional crisis demand while eroding the institutional foundations that...
Rate Hikes Now Start From a Higher Baseline
If we are now about to enter a Central Bank rate rising period, it's worth considering we are in a very different place to the last rate rising period. Back a few years ago interest rates were artificially low and...
A Seventh Central Bank Interest Rate Cut in Russia
On March 20 2026 the Central Bank of Russia trimmed its benchmark rate by 50 basis points to 15.0%, the seventh reduction since the October 2024 peak of 21%. The cumulative easing amounts to six percentage points, the deepest policy shift in over two...
Fed Governor Waller Balks at Rate Cut Amid Inflation Worries
Fed governor Chris Waller to CNBC's Steve Liesman: I was ready to dissent for a rate cut after the February jobs report came out. But the inflation picture is looking worse and has become more of a concern because the Strait...
Dollar Mixed, Equities Down, Bond Yields Higher, and Mood Remains Fearful
The U.S. dollar posted mixed moves, gaining against the yen and won while slipping versus the euro, sterling and Canadian dollar. U.S. Treasury yields rose five basis points, outpacing modest increases in Japan, Spain, Switzerland and Germany, while all four...
Watch: Why We Still Think EUR/USD Can Reach 1.20
ING’s foreign‑exchange strategists remain bullish on the euro, forecasting EUR/USD could climb to 1.20 by year‑end despite heightened geopolitical risk, rising oil prices and a temporary US inflation spike. They argue the Federal Reserve will treat the oil‑driven price bump...
USD Rebounds After Over‑reaction; Short Positions Risky This Weekend
$USD was bought aggressively on a hawkish read of Powell's press conference on Wed and was sold harder yesterday in what seems to be an overreaction to the ECB and BOE. It has come back bid. Who wants...
AUDUSD Net Longs Reach Highest Level Since 2017
Another remarkable change in net-speculative positioning comes from AUDUSD. A further nudge in the net long positioning, pushes futures spec interest to the heaviest long since October 2017. A carry drive as rate forecasts pick up https://t.co/sJ0Xl2KxxD
ECB Policymaker Villeroy: Potential Rate Hikes Will Be Decided Meeting by Meeting
ECB policymaker Francois Villeroy de Galhau warned that any future rate adjustments will be decided on a meeting‑by‑meeting basis, with a bias toward hikes rather than cuts. He emphasized the central bank’s vigilance and readiness to act amid energy market...
EURUSD Futures Net Long Plummets Record 84K Contracts
In case you missed it, net speculative futures positioning behind $EURUSD posted its biggest weekly 'net drop' on record - an 84K contract drop in the net long. That's a strong move away from the anti-dollar pressure over the past...
USD/CHF Bulls Stalled at Critical Resistance Level
Swiss Franc Short-term Outlook: USD/CHF Bulls Rejected at Key Resistance https://t.co/rLrumlAN5T $USDCHF Daily & 240min Charts https://t.co/pcvuoorqWD
FX Daily: Hawkish Hangover
European central banks delivered a hawkish surprise, pushing the euro and pound higher while the dollar weakened. The ECB signaled a possible April rate hike, adding 15 basis points to market expectations, and the Bank of England voted unanimously to...
Markets Flip to Rate Hikes as US Inflation Spikes
Yup. Market pricing in 2-3 rate hikes for ECB and BoE How many for the Fed?!
Waiting for Italy, France to Trigger EU Debt Relief
Feeling listless and irritable as I wait for Italy (lhs) to call for the ECB to activate its TPI tool because markets are being anti-Italian and France (rhs) to call for joint EU debt issuance on account of "force majeure"...
Making Sense of the Bank of Canada Interest Rate Decision on March 18, 2026
The Bank of Canada kept its overnight rate at 2.25% on March 18, marking a third consecutive hold. Inflation slowed to 1.8% in February, still under the 2% target, while the labour market remains weak. The decision reflects caution amid...
Single‑mandate Central Banks Are Trapped, Forced to Hike
This week we unpack just how trapped central banks are, especially single mandate central banks who are forced to hike into this shock. Shit is not great yo
Fed Rate Outlook Flips: From Cuts to Possible Hike
Fed funds have flipped to tiny pricing for hikes. Completely unforeseeable and insane move from the perspective of where we were a few months ago. We have gone from captured Fed will cut 3 times to oil shock opens door for...
ECB Would Need April Hike If Price Outlook Sours, Nagel Says
European Central Bank Governing Council member Joachim Nagel warned that the ECB could be forced to raise interest rates as early as April if inflationary pressures intensify, particularly due to the ongoing Iran war. He indicated that a deteriorating medium‑term...
G10 Hawkish Policies Weigh on Dollar Strength
The reason the Dollar isn't stronger is because markets price a much more hawkish policy shift by central banks in the G10 compared to the Fed. That's moving rate differentials against the Dollar and tempering what otherwise would be an...
CNY Posts Lowest USD Fix Since April 2023
PBOC set the $USD fix today at its lowest level since April 2023. Since the war began, $CNY is the fourth best EM currency, trailing HKD and two high yielders in Latam. YTD, CNY it has only been bested by...
Asia Week Ahead: Japanese Inflation and South Korean Sentiment Data
Japan’s February CPI is expected to slow further thanks to an energy subsidy, but core‑core inflation will stay well above the 2% target, keeping the Bank of Japan cautious about rate hikes. The central bank is likely to postpone an...
Europe/UK Rate Hike Likely: 12% April Odds
Europe/UK back at it, forcing their rate hikes on us. April hike odds 12%... more than just noise
Swaps Market Overprices Central Bank Rate Hikes
The swaps mkt discounted slightly more than BOE 3 hikes this year. Surely that is exaggerated. The mkt has 70 bp of ECB hikes discounted. Despite the hawks trying to outflank Lagarde's moderate tone, that too seems a...
CBDC Neutrality, Bank Liquidity, and the Hybrid Nature of Bank Deposits
Central‑bank digital currency (CBDC) could remain neutral for banks if the central bank recycles CBDC balances back to them at rates equal to deposit‑funding costs, preserving credit creation and profit margins. Deposits, however, are hybrid instruments that provide money‑like services...
April ECB Rate Hike Possible if Data Warrants
Makhlouf says an April ECB hike is possible if data signal there’s a need https://t.co/zEOl2Ko48A via @flacqua @jenniduggan @livfletcher_ https://t.co/IHW9dxYRHQ
ECB Baseline Assumes Two Hikes; Worse Scenarios Need More
Subtle but important point. The ECB's baseline incorporates nearly two rate hikes. The adverse and severe scenarios use the same assumptions, and thus may require more than two hikes to bring inflation back to target. Only makes things sligthly less...
MacroVoices #524 Simon White: War + Inflation = More Inflation
Simon White joins MacroVoices to argue that ongoing geopolitical conflicts are adding a new layer to inflationary pressures, creating a "three‑act" inflation scenario. He draws parallels between today’s monetary stimulus and the 1970s oil shocks, suggesting that war‑driven commodity spikes...
JPM Predicts Back-to-Back ECB and BOE Rate Hikes
JPM woke up this Friday morning and chose violence ... looking for back-to-back hikes from both the ECB and BOE.
BOJ and Fed Hold Rates, Yen Gains 0.4% as Dollar Stalls
The Bank of Japan and the U.S. Federal Reserve both kept policy rates steady, prompting the yen to climb roughly 0.4% against the dollar and leaving the greenback largely flat. The moves come amid heightened oil‑price volatility from the Middle‑East...
BoC Holds Rates; War Fuels Rising Inflation
Bank of Canada won’t be cutting rates anytime soon. Inflation is rising because of the war 🇮🇷
Lagarde Leans on “Propagation” Amid Inflation Uncertainty
ECB's Lagarde is asked to be specific on inflation in a bad case scenario. Instead of Powell's "I dunno", Lagarde says: be patient, I'll expand. Longer speech on "particularly attentive to..." -- uses the magic word "second round effect" --...
Dollar Near 100; Break Higher Tightens Liquidity
Dollar pressing range highs just below round 100. Break higher and liquidity tightens. Reject and risk can breathe a bit. $DXY https://t.co/ZvkycsmahB
Yen Surges as Dollar Falls, Stay Cautious
GUESS WHAT'S NEW TODAY... Yen is spiking higher as USD sells off - that is my MONEY GOES HOME™️ in full view 😭 The market bounce 'looks' like put monetization on dollar dump, BUT don't count your right tail chickens before they...
Late‑
10y UST yields (blue, RS) v. USDCNY (red, LS), since Russia invaded UKR in Feb-22. Something changed in late 2025 (stronger CNY v. USD and higher 10y UST yield, instead of lower.) https://t.co/hW48oZdc2B
June ECB Rate Hike More Likely than April
ECB sources suggesting they could hike in April, but if it goes that far I think June is more likely. ECB meeting: 30 April Consumer Expectations Survey (27 March, too early) Survey of Professional Forecasters (4 May, but they’ll get hints) Corporate Telephone...
ECB Officials Hint at Possible April Rate Hike
ECB officials see possibility of rate hike at April meeting https://t.co/p0GjFZzqz2 via @jrandow @Alemrome https://t.co/WN1EPwWl0Y
Dollar's Short-Term Risks vs Long-Term Strength
The U.S. Dollar: Short vs. Long Term Watch Full Video on YT ➡️ https://t.co/vgIHgyjagj #usd #useconomy #geopolitics
ECB Baseline Obsolete as Markets Price Adverse Inflation
🇪🇺 Unfortunately for the ECB, and despite the staff best efforts to use a later-than-usual cut-off date, their baseline scenario looks instantly obsolete. Market pricing for inflation is already consistent with the adverse scenarios. The main question is about indirect effects....
De-Dollarization Gold Theory Dead, I Remain Defensive
The de-dollarization thesis driving gold may be well and truly dead. I'm acting defensively. I have failed - once again - to internalize a theory of mind for pathological narcissists and psychopaths.
ECB Forecasts Mild Recession With
🇪🇺 ECB's risks scenarios, including a severe shock generating a mild recession, a rise in unemployment and core inflation peaking at 4%. The latter don't include any monetary policy change as @Lagarde noted, as opposed to the staff which accounts...
ECB's Caution Highlights BoE's Bold Move
its funny (to me) that the ECB obviously looked at the BoE statement today and thought "OK, lets not do anything THAT crazy". The BoE... making the ECB seem sensible
Lagarde’s Mic‑drop Secures Two ECB Rate Hikes
If I heard correctly, Lagarde just talked the ECB into two hikes this year with her mic drop at the end.