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Internationale valutamarkeder oplevede et skift, hvor energichokket førte til en bred nedgang i risikovillighed grundet stigende markedsvolatilitet. USA’s dollar styrkedes, især da investorer reducerede deres positioner. Fokus er nu på, om energipriser vil falde, særligt hvis Strædet Hormuz genåbner, samt om centralbanker kan løsne pengekredsløbet. I Europa blev euroen svækket af både energipriser og risikonedtrækninger, men kan stabilisere sig omkring 1.1550/1.1575 USD. Central- og Østeeuropæiske valutaer pressedes, men fald i gaspriser kan give en midlertidig genopretning. I Tyrkiet og Rumænien udfordres centralbankerne af presset på valutaerne, hvor stigende oliepriser og inflationsrisici forårsager volatilitet.
Fra ING:
FX markets saw a subtle shift in drivers yesterday, where the energy shock switched into a broad deleveraging of risk as cross-market volatility spiked. These risk unwinds tend to be short, sharp affairs. Before re-entering trades, investors will need to see some good news, either in the form of lower energy prices or central banks being able to ease policy
Near‑term market risk will hinge on whether energy prices can retreat, contingent on a potential reopening of the Strait of Hormuz
USD: Focus could switch to US prices and the Fed
We saw a subtle shift in the drivers of FX markets yesterday. If Monday was entirely about the impact of high energy prices on energy-importing/exporting currencies, Tuesday was the broad de-leveraging of open positions as cross-market volatility spiked. Here, equities were hit hard – led by financials. That banks led the sell-off was down to the large overweight positioning in that sector. It feels like the story of redemptions in the private credit space is ephemeral to the overall sell-off (e.g. Blacktsone, Blue Owl headlines), but is a story that should be watched. Instead, the spike in volatility and rising Value-at-Risk metrics has prompted a broad reduction of position sizes, which in FX markets is another dollar positive given that investors were short. We would also say that some of the amazing headlines overnight – e.g. South Korea’s Kospi index falls 12% – follow a 50% run-up in this index year-to-end February.
Near term market drivers of risk will probably be both whether energy prices can reverse lower if the Straits of Hormuz can somehow reopen, and also whether central banks will be able to cut rates to support activity, or at least not tighten policy. On the former, risk assets received a brief lift last night after President Trump said that shipping in the Straits may receive naval convoy support and that US federal institutions stood to back the insurance of shipping fleets. Those were positive, targeted comments, but the market will want to see evidence of this happening. So far, energy markets are remaining bid.
As to central banks, we have been writing this week about how the inflationary risk of the energy shock is re-pricing the short-end of the curve. That trend briefly reversed yesterday after equity losses intensified. But unless we see another major equity sell-off today, the hawkish re-pricing of the short-end of the curve looks the dominant theme. That is a dollar positive. We see a few inputs into this theme today. Assuming the monthly ADP release comes in near +50k, investors will assume that the Fed has been right to assume that downside risks to the labour market have abated. We will then be looking at the prices paid component of the ISM services index. A high reading there can support the dollar. And then tonight we’ll see the Fed’s Beige Book ahead of the 18 March FOMC meeting. Any signs that price pressures remain sticky could see the market further scaling back expectations for two Fed cuts this year. 45bp of easing is currently priced this year.
The dollar has had a very good week so far based on the factors described above. DXY traded as high as 99.68 yesterday. We doubt investors will want to chase it through the 100.00/100.35 highs seen over the last eight months. But equally, we will need to see some clear improvement in the energy story before investors are prepared to enter short dollar positions again.
Chris Turner
EUR: 1.1500 maybe the bottom of the range
Long euro positioning – especially in the asset management community – left EUR/USD vulnerable yesterday. 1.1530 was the low. So, EUR/USD is being hit on both the terms-of-trade story and the broad-based deleveraging story. The terms of trade story will be the far more important theme and the duration of this energy shock will determine whether EUR/USD needs to trade down to 1.10/12 or can find support near 1.15. Our base case is the latter, in which we would expect operational intensity to decrease over the next week and the Straits of Hormuz to slowly reopen.
Barring any major new headlines from the Gulf today, we suspect conditions could calm a little (equity futures look less bleak this morning) and EUR/USD could find support in the 1.1550/1575 area.
Chris Turner
CEE: First chance for relief
The region saw a second wave of sell-off yesterday, and in our view, we saw the main part of the shock since the outbreak of the US-Iran conflict. We saw some signs of relief at the end of yesterday’s trading session despite seeing multi-week highs earlier in the day with EUR/HUF and EUR/CZK while EUR/PLN jumped to its highest levels since April last year. However, oil prices saw some stabilisation and, more importantly for CEE, gas prices fell from their highs despite the ongoing conflict headlines. This gives CEE currencies a chance to recover today, in our view.
The National Bank of Poland will decide on rates today, where, before the conflict began, a 25bp rate cut to 3.75% seemed like a done deal. After the developments in recent days, the NBP’s decision is again a close call, but the rate cut remains the baseline for our economists . The Monetary Council will have a new forecast available, showing lower inflation near the central bank’s target, but based on outdated assumptions for oil prices. Therefore, the statement after today’s decision will receive more attention than usual, and the decision itself could determine the further direction of EUR/PLN with roughly 25/75 chances priced in markets in favour of no change.
In the Czech Republic, February inflation will be published this morning. The market and the central bank expect no change at 1.6% YoY, while our economists expect a decrease to 1.4%. This should help calm the sell-off in rates. However, the market’s attention is probably less than usual and the market would have to see a more significant surprise in one direction for a more significant reaction in the current market conditions. At the same time, our economists have removed the CNB rate cut in the summer from our forecast, and now we do not expect any changes in rates this year.
Frantisek Taborsky
TRY and RON: Central banks’ will tested
Managed currencies in the region, the Turkish lira and the Romanian leu, have seen a significant test of central banks’ ability to keep their currencies under control in the last two days. In Turkey, February inflation yesterday confirmed a year-on-year increase for the first time since September last year, which, in the context of the US-Iran conflict and rising oil prices, puts the Central Bank of Turkey in an uncomfortable position. At the same time, TRY was and probably still is the largest carry trade in the EM space.
As we expected, after the conflict broke out, CBT was able to comfortably keep USD/TRY essentially unchanged despite significantly reducing these carry positions. We estimate that the position has been reduced by around TRY16-17bn to almost half of the previous highs seen before the conflict broke out. However, this should not be a significant problem for CBT given its historically high FX reserves. On the other hand, we saw the expected spike in FX implied yields with 1M tenor jumping to 40%, effectively tightening monetary conditions instead of the central bank. We expect USD/TRY to remain stable in the coming days as CBT tries to limit any additional inflationary pressures.
In Romania, EUR/RON is seeing a similar situation where long positioning in FX but also in Romanian government bonds is unwinding after a strong rally in recent months. Yesterday, EUR/RON saw a short-term spike above 5.120. However, after a few minutes, the pair returned below 5.100. The real activity in the market is again revealed by the significant spike in FX implied yields, where 1M jumped by 90bps only yesterday to 6.30%, close to the NBR key rate. Here, we believe that most of the long positioning built up before the conflict broke out has been unwound and the situation is now more balanced, but we can assume that we will see in the official NBR data later a significant decrease in the excess liquidity that we saw in January data (around RON42bn, the highest since July 2024).
Looking further, we expect a similar development as in Turkey, given that the central bank will not want to allow any additional inflationary pressures and current conditions are not suitable for a shift in the EUR/RON level.
Frantisek Taborsky
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