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Currencies Outlook

Beware of rising real interest rates

Thursday, 20 August 2026, written by Edward Markus

Supply-demand dynamics in capital markets are deteriorating: government deficits and the AI boom are driving up demand for capital, while an aging population and declining confidence in the US are constraining supply. In our latest currency outlook we discuss what this means for EUR/USD and the other major currency pairs.

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Previous reports

FX & Rates | Oil Prices Remain Key for Interest Rate and Currency Markets

Friday, 07 August 2026

Note: This week, instead of separate Currencies and Interest Rate Outlook publications, we're issuing one combined report covering both topics, due to the summer holiday period.

Higher oil prices increase inflation risks and raise the likelihood that central banks will need to tighten monetary policy further. We discuss the implications for U.S. and European interest rates, EUR/USD and the other major currency pairs.

 

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Oil Prices Remain Key for Interest Rate and Currency Markets

Thursday, 06 August 2026

Note: This week, instead of separate Currencies and Interest Rate Outlook publications, we're issuing one combined report covering both topics, due to the summer holiday period.

Higher oil prices increase inflation risks and raise the likelihood that central banks will need to tighten monetary policy further. We discuss the implications for U.S. and European interest rates, EUR/USD and the other major currency pairs.

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Rising energy prices and interest rates are making the euro vulnerable

Thursday, 23 July 2026

The US economy is less sensitive to rising energy prices than the European economy, and expectations of rate hikes by the Fed have increased. Yet, despite these supportive factors, the EUR/USD remains remarkably stable. In this FX update, we examine the reasons behind this resilience and explain why we nevertheless expect the EUR/USD to weaken further.

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