At Any Rate

Global FX: How Much Is Too Much?

At Any Rate

•February 13, 2026•24 min

At Any Rate•Feb 13, 2026

Why It Matters

Understanding the interplay between US equity performance and FX dynamics is crucial for investors seeking to protect or enhance returns in a volatile global environment. The episode provides timely guidance on navigating currency risk as markets react to shifting US stock trends, helping listeners make more informed allocation decisions.

Key Takeaways

•DXY fell 0.6% as US equities underperformed global markets
•Strong payrolls failed to boost dollar, surprising market reaction
•Yen weakened despite Japan election; fiscal expansion unchanged
•Scandinavian crowns broke multi‑year lows, supported by Norway CPI surprise
•Swiss franc outperformed high‑beta currencies amid safe‑haven flows

Pulse Analysis

The episode opened with a clear picture of a weakening dollar. The DXY slipped 0.6% over the week while U.S. equities lagged global peers by roughly three points, and short‑end real yields fell versus G7 counterparts. JP Morgan’s FX team highlighted that their traditional fair‑value models are strained in this semi‑structural, pro‑growth, dollar‑bearish regime. They flagged potential exit points: waning growth signals, rising front‑end rates, a stabilising CNY fix, and a shift in the CUS‑equity relationship. Their two‑factor equity model, which blends relative equity performance with absolute equity beta, suggests only modest dollar moves for now.

A surprise theme emerged around labor‑market data. Despite payrolls exceeding expectations—strong job gains, firmer wages, and lower unemployment—the dollar retreated, especially against the yen. The hosts linked this to the Fed’s asymmetric reaction function, where rate cuts are priced earlier than hikes, creating an odd decoupling between robust data and currency weakness. In Japan, the post‑election environment has not altered the fiscal expansion stance nor the BOJ’s behind‑the‑curve policy, leaving the yen’s recent strength possibly premature.

European FX dynamics rounded out the discussion. Scandinavian crowns, notably the Norwegian krone, broke a multi‑year downtrend after an unexpectedly high CPI print, reinforcing a bullish outlook despite broader market uncertainty. Conversely, the Swiss franc outperformed high‑beta G10 currencies, buoyed by safe‑haven flows, precious‑metal sentiment, and a potentially more hands‑off SNB stance. In the UK, political risk eased after Labour secured cabinet backing, supporting a tactical bullish stance on sterling pending upcoming labour‑market and CPI data. Overall, the conversation underscored how intertwined equity performance, policy nuances, and geopolitical headlines shape FX trajectories today.

Episode Description

Arindam Sandilya, James Nelligan and Patrick Locke discuss the FX outlook against the backdrop of US equity stress and underperformance of US stocks relative to the rest of the world.

This podcast was recorded on 13 February 2026.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5201480-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures.

© 2026 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party

Show Notes

Global FX: How much is too much? | At Any Rate

At Any Rate

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