Trump: not going to be doing diesel export ban
In a move contrary to speculations, President Trump has ruled out an export ban on diesel, coinciding with G7 nations' decision to draw from their emergency reserves. This signals a commitment to supply stability in the energy market, alleviating some concerns over stagflation and boosting overall risk sentiment. By maintaining access to overseas diesel markets, the US is poised to bolster its economic positioning and enhance demand for the dollar amidst fluctuating global energy dynamics.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). The markets are currently tentatively responding to the implications of US energy policies, which can influence currency pair movements.
How firms align
Aligning with the positive sentiment from the headline is JPMorgan with a target of 1.10 for EUR/USD, indicative of a bullish outlook. On the contrary, BofA holds a more cautious stance, targeting 1.04, suggesting a divergence in views among analysts. See our internal reports for more detailed analysis from these firms.
What the data shows
Recent forecasts reflect a moderate uptick in USD positioning as traders digest the implications of policy changes. Insights related to this shift are available in our latest research on energy supply dynamics, specifically in /research/diesel-supply-impact.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Trump's decision supports energy supply stability, boosting USD demand.
- 02Traders should monitor USD as a sense of risk appetite shifts.
- 03Expect volatility around the G7 announced releases and US energy policy changes.
Market implications
Watch for EUR/USD reaction around the 1.075 level, as market positioning could shift significantly based on future energy policy announcements. The upcoming G7 discussions might provide additional context for subsequent dollar activity.
Risks to this view
A sudden retraction on the diesel policy, or unexpected shifts in energy supply forecasts could reverse current bullish sentiment on the dollar. An unexpected ban would directly challenge today's outlook.
Sentiment by currency
USD+EUR~JPY~GBP~Composite USD score: +0.60
Sources & References
How we cover this story