Low conviction and high uncertainty: inside FX markets now

This week on Currency Exchange, Eimear Daly and Brian Daingerfield step back from the day-to-day market headlines to focus on what global FX clients are thinking about the US dollar, geopolitical risk and the broader macro outlook.Against a backdrop of rapidly shifting developments in the Middle East, the discussion explores why conviction across FX markets remains unusually low, how investors are positioning across G10 currencies, and what themes are emerging in China and broader emerging markets.Key themes discussedFX markets: Low conviction and headline-driven tradingBrian Dangerfield explains why fast-moving geopolitical developments are preventing investors from taking strong directional positions in FX, despite large moves in rates and commodities markets.Dollar outlook: Fed on hold versus global tighteningHow markets increasingly expect the Fed to remain sidelined while other central banks continue tightening policy, potentially weighing on the dollar over time.G10 FX: Sterling, yen and commodity currenciesSterling continues to outperform expectations, why intervention risk is dominating yen positioning, and why investors still favour the Australian dollar despite recent volatility.China and EM: The rise of high-value manufacturingChina’s economic transition toward AI and advanced manufacturing is reshaping profit growth, inflation dynamics and currency policy expectations. You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.This episode was recorded on 28 May 2026.For any terms used please refer to this glossary https://www.natwest.com/corporates/insights/markets/glossary.htmlPlease view our full disclaimer here: https://www.natwest.com/corporates/disclaimer.html