July 2024 Monthly Report

Read the Ballinger Monthly Report for July below.

Monetary policy remains key in FX, but politics jumped into the spotlight too in June. In isolation, ​​​​​the bearish case for the US dollar continued to grow as both the inflation and the labour market cooled further, reviving bets on a September rate cut. On that basis, EUR/USD should have ended higher.

Instead, dovishness in Europe and an election-induced euro risk premium more than offset the impact of the softer macroeconomic picture in the US. The prospect of deteriorating fiscal discipline in France permeated the markets after a Macron snap election looks to have handed significant gains to both the far-right and far-left.

The Swiss franc was the top performer in the G10 despite a second rate cut, supported by a Q1 growth surge and an election-induced haven bid. The yen was again the worst, hitting 38-year lows and sounding the alarm on possible Tokyo intervention. ​​​​​