Sterling shrugs, dollar crowds, yen cracks

Markets may look calm, but beneath the surface FX risks are building. In this episode of The Currency Exchange, Brian Daingerfield and Paul Robson unpack sterling’s surprising resilience, the political and fiscal risks waiting in the autumn, why the dollar’s rally may be running out of fresh fuel, and what Japan’s tolerance of yen weakness could signal for global markets. They discuss:Why sterling continues to defy bearish expectations, helped by yield support, possible safe-haven flows and renewed UK equity inflows.How UK politics, fiscal rules and gilt supply could become bigger risks for sterling later in the year.Why French political risk is worth watching, even if markets are not fully pricing it yet.How Middle East tensions and oil prices are feeding into dollar positioning and broader risk sentiment.Why the dollar has stayed resilient despite crowded positioning, stronger US data and shifting Fed expectations.Why NatWest expects a slower, later dollar decline through the second half of the year.What the lack of confirmed Japanese FX intervention may reveal about official tolerance for yen weakness.Why Japan’s fiscal and monetary mix remains a major headwind for the yen.Remember to hit subscribe so you can listen to the latest episodes in this series as soon as they're available and get our views on the big themes and events moving markets and shaping the economy.This episode was recorded on 9 July 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