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Currencies Outlook

Interest rates, energy prices and carry trades set the tone

Thursday, 15 October 2026, written by Edward Markus

Rising interest rates are hitting Europe harder than the US and Japan, especially now that French public finances are under pressure. Find out in our latest FX report what this, together with carry trades and higher energy prices, means for EUR/USD and the other major currencies.

This report is published: Weekly

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Previous reports

Interest rate policy and political risks are taking their toll on the euro

Thursday, 01 October 2026

How much further do central banks need to raise interest rates to bring inflation back to 2%? That depends on second-round effects and on uncertain potential growth. The answer differs between the US and Europe, and that difference has major consequences for EUR/USD. Read our latest currency report to see how far those consequences reach and how the other major currencies respond.

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Carry trades, political risks, and energy prices could shake up sluggish currency markets

Thursday, 17 September 2026

Volatility in the currency markets is low. This increases the appeal of carry trades and their influence on the markets. We do not expect volatility in the currency markets to remain low for long. Higher energy prices and interest rates are having a different impact on the U.S. and European economies, and we expect political risks to increase, particularly in the Eurozone. In this report, we examine which currencies will benefit from this and which will not.

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Yen shakes up sluggish currency markets

Thursday, 03 September 2026

Japan and the U.S. intervened jointly to prop up the yen, with mixed results. Meanwhile, Washington fears that Tokyo may have to sell U.S. government bonds to secure enough dollars, with all the consequences that entails for long-term U.S. yields. You can read about what this means for the yen, the dollar, and other currency markets in our full report.

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Hedging Currency Risks

FX market volatility can quickly erode margins and even competitiveness.

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