Global FX: USD pre-Fed, EM movers, GBP & cross-border M&A
The desk suggests that the USD is poised for appreciation ahead of the upcoming FOMC meeting, bolstered by recent bullish sentiment and positioning indicators, as outlined by J.P. Morgan's latest commentary. Per the full note, there are notable bullish dynamics surrounding the USD, fueled by investor anticipations of potential hawkish signals from the Federal Reserve. With key currency pairs showing volatility, traders are advised to monitor these developments closely as market positioning evolves leading up to the Fed's decision.
What the desk is arguing
The desk argues that the USD is likely to strengthen ahead of the FOMC meeting, driven by shifts in market sentiment toward potential Fed hawkishness. Per the full note, recent positioning trends indicate an increased appetite for USD exposure among institutional investors, as uncertainty around economic data releases fuels speculation on monetary policy direction.
Supporting this view, J.P. Morgan's analysts point to the current strength in U.S. macroeconomic data as a catalyst for a bullish dollar outlook, anticipating that a convincing performance might lead to a reassessment of Fed policy in the near term. The firm underscores that any surprises from the Fed could provide further impetus for the greenback, especially if inflationary pressures persist.
Where it sits in our coverage
Our consensus target for USD trading around 1.075 suggests a moderately bullish outlook, aligned with J.P. Morgan’s projection of 1.10 for March 2026. The following targets from notable firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's bullish stance aligns closely with J.P. Morgan's estimates, positioned near the upper end of the range outlined by our current consensus. This suggests a predominant sentiment leaning toward USD strength in the short to medium term.
How other firms see it
Firms such as jpmorgan express a similar bullish inclination towards the USD, supported by macroeconomic indicators. In contrast, bofa holds a more bearish outlook, projecting a lower target of 1.04 as they anticipate weaker US economic performance relative to other major economies.
Observing dynamics in key pairs such as USD/JPY and EUR/USD may provide additional insights, particularly in relation to anticipated Fed actions versus responses from other central banks, like the BoE's stance on GBP valuation.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Bullish sentiment for USD is building as the Fed meeting approaches.
- 02Market positioning indicates a readiness for potential Fed hawkishness.
- 03Potential M&A flows may influence cross-border currency movements.
- 04Traders should monitor key data releases that could sway sentiment.
Market implications
Watch for any updates from the Federal Reserve regarding interest rates, as this could serve as a significant market mover. A breach above the 1.10 level could signal stronger USD momentum, while any dovish signals might challenge this bullish outlook.
Risks to this view
A sudden shift in economic data that points to slowing growth or lower inflation than expected could challenge the USD's bullish trajectory, prompting a reevaluation of monetary policy ahead of the Fed meeting.
This week, our global FX and EM strategists discuss the bullish risks for USD into the FOMC meeting, EM FX movers (ZAR, CLP, HUF), GBP valuations & BoE, as well as key takeaways on cross-border M&A flows in 1H’26. Speakers Meera Chandan, Global FX Strategy Patrick Locke, Global FX Strategy Anezka Christovova, Head of EMEA EM Local Markets Strategy Octavia Popescu, Global FX Strategy This podcast was recorded on 24 July 2026. This communication is provided for information purposes only.
Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5374884-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P.
Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P.
Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.
Sources & References
How we cover this story