Global FX: US policy watch, euro/ CEE bloc lagging, NOK and GBP resilience
In the latest research from J.P. Morgan, the desk emphasizes the implications of recent firmer inflation data for the US dollar, highlighting a potential resilience in G10 currencies like the CHF, GBP, and NOK. Per the full note, this supportive outlook contrasts with a more cautious stance on emerging market (EM) currencies amid uncertain growth. The consensus among institutional traders appears to lean toward cautious optimism for the dollar, driven by expectations of continued policy adjustments from the Federal Reserve. With no major calendar catalysts looming, traders may need to navigate these insights carefully as global market dynamics evolve.
What the desk is arguing
The thesis centers around the strength of the dollar following firmer US inflation data and anticipated monetary policy maneuvers. J.P. Morgan scholars believe these developments will bolster the USD against a backdrop of mixed performance in EM currencies, as indicated in their analysis. They suggest that markets should prepare for ongoing discussions regarding Federal Reserve policy shifts influencing the dollar's strength.
Supporting this view, the desk highlights that recent economic indicators continue to suggest inflationary pressures, necessitating a re-evaluation of dollar strategies amidst shifting rate expectations. The commentary also implies that resilience in G10 currencies such as the GBP and NOK may serve as a counterbalance to US dollar strategies, as market participants reassess global growth trajectories.
Counterintuitively, this underscores a divergence from some bearish projections for the dollar, as the prevailing outlook is angled more towards strength rather than weakness given the current economic framework.
Where it sits in our coverage
Institutionally, our consensus target for the USD stands at 1.075, with a range from 1.04 to 1.12. Notably, current targets from key firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view appears aligned with the forecast provided by jpmorgan, illustrating a consensus that leans towards the stronger end of the forecast spectrum, contrasting with bofa, which adopts a more cautious position.
How other firms see it
Firms such as jpmorgan and deutsche express a similar bullish sentiment towards the USD, suggesting an outlook that favors dollar strength. Conversely, bofa has positioned itself more bearish, projecting lower targets amidst global uncertainties.
In this context, the EUR/USD trajectory is particularly relevant, given the influence of ECB policy decisions on exchange rate dynamics. Additionally, watch for indicators relating to US GDP growth as they could pivot this conversation further.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Recent US inflation data supports a stronger dollar outlook.
- 02Expect continued policy adjustments from the Federal Reserve.
- 03G10 currencies, particularly GBP and NOK, display resilience against dollar volatility.
- 04Cautious sentiment persists in the EM currency market.
Market implications
Traders should monitor the 1.075 level for potential resistance or support as the dollar responds to incoming inflation data. Additionally, any shifts in Federal Reserve communications could alter market positions ahead of upcoming economic indicators.
Risks to this view
A sudden reversal could occur if inflation metrics unexpectedly decline or if clear signals from the Federal Reserve indicate a halt in rate adjustments. Additionally, geopolitical tensions in EM regions could pressure both the dollar and EM currencies, leading to volatility in the FX markets.
This week, our Global FX Strategists Meera Chandan, Pat Locke, Anezka Christovova & James Nelligan discuss the implications for the dollar from the latest US data, including firmer inflation, as well as other upcoming US policy developments. They also address the outlook for EM currencies amid a more uncertain growth backdrop, against still-constructive views across CHF, GBP & NOK in G10. Speakers Meera Chandan, Global FX Strategy Patrick Locke, Global FX Strategy Anezka Christovova, Head of EMEA EM Local Markets Strategy James Nelligan, Global FX Strategy This podcast was recorded on 16 October 2026.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5491590-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase & Co. All rights reserved.
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