A stand-out macro trend of 2025, the weakness of the US dollar remains a focal point for a market that is still heavily short. Is the consensus risk ripe for a surprise or are further headwinds in store for the world's most widely traded currency? And how might macroeconomic developments in Japan, Europe and the UK add to or detract from the appeal for dollars? This week, we discuss these factors and the broader FX landscape for developed markets, with Lee Ferridge, Head of Macro Strategy for the Americas at State Street Markets.

A stand-out macro trend of 2025, the weakness of the US dollar remains a focal point for a market that is still heavily short. Is the consensus risk ripe for a surprise or are further headwinds in store for the world's most widely traded currency? And how might macroeconomic developments in Japan, Europe and the UK add to or detract from the appeal for dollars? This week, we discuss these factors and the broader FX landscape for developed markets, with&nbsp;Lee Ferridge, Head of Macro Strategy for the Americas at State Street Markets.

Street Signals is a weekly podcast packed with insights about the latest developments in financial markets from State Street Markets. Leveraging new tools, proprietary data and deep expertise, the Markets research team delivers highly valued market analysis on a daily basis to the world’s leading institutional investors. Join Street Signals' host, Tim Graf, State Street’s Head of Macro Strategy for EMEA, as he discusses the most important matters moving markets with guests from State Street and industrywide. 

Street Signals is a weekly podcast packed with insights about the latest developments in financial markets from State Street Markets. Leveraging new tools, proprietary data and deep expertise, the Markets research team delivers highly valued market analysis on a daily basis to the world&rsquo;s leading institutional investors. Join Street Signals' host, Tim Graf, State Street&rsquo;s Head of Macro Strategy for EMEA, as he discusses the most important matters moving markets with guests from State Street and industrywide.&nbsp;

Street Signals

Street Signals is a weekly podcast packed with insights about the latest developments in financial markets from State Street Markets. Leveraging new tools, proprietary data, and deep expertise, the Markets research team delivers highly valued market analysis on a daily basis to the world’s leading institutional investors. Join Street Signals' host, Tim Graf, State Street’s Head of Macro Strategy for EMEA, as he discusses the most important matters moving markets with guests from State Street and industrywide.

Street Signals is a weekly podcast packed with insights about the latest developments in financial markets from State Street Markets. Leveraging new tools, proprietary data, and deep expertise, the Markets research team delivers highly valued market analysis on a daily basis to the world&rsquo;s leading institutional investors. Join Street Signals' host, Tim Graf, State Street&rsquo;s Head of Macro Strategy for EMEA, as he discusses the most important matters moving markets with guests from State Street and industrywide.

The US Dollar Downtrend: Dawn or Denouement?

After getting the year-ahead views of the Macro Strategy team at State Street Markets last week (which you can listen to here), this week we hear from our FX Trading team. Questions of central bank independence and policy divergence top the list of risk factors for 2026, with implications of the AI investment cycle also factoring heavily into a macro outlook. We catch up with Peter Vincent, EMEA Head of Trading, for his thoughts on the state of the US labor market, inflation, policies of the Federal Reserve, ECB and Bank of Japan, and the other critical drivers for rates and FX around the world.

After getting the year-ahead views of the Macro Strategy team at State Street Markets last week (which you can listen to <a href="https://podcasts.apple.com/us/podcast/the-12-trades-of-risk-mas-a-2026-macro-outlook/id1692292577?i=1000739632006">here</a>), this week we hear from our FX Trading team. Questions of central bank independence and policy divergence top the list of risk factors for 2026, with implications of the AI investment cycle also factoring heavily into a macro outlook. We catch up with Peter Vincent, EMEA Head of Trading, for his thoughts on the state of the US labor market, inflation, policies of the Federal Reserve, ECB and Bank of Japan, and the other critical drivers for rates and FX around the world.

Trading Notes for '26

The Macro Strategy Team at State Street Markets has published their top ideas for the year ahead. Will the tech stock bull run continue, or are recent, rising credit concerns enough to derail sentiment and valuations? Was 2025's dollar decline the beginning of a multi-year trend or is the buck on the brink of reversal? And are Japan's recent attempts at reflation about to stall or take the next step to success? We present a dozen ideas, across equities, fixed income and FX, all with an eye on which themes will continue into and emerge from 2026.

The Macro Strategy Team at State Street Markets has published their top ideas for the year ahead. Will the tech stock bull run continue, or are recent, rising credit concerns enough to derail sentiment and valuations? Was 2025's dollar decline the beginning of a multi-year trend or is the buck on the brink of reversal? And are Japan's recent attempts at reflation about to stall or take the next step to success? We present a dozen ideas, across equities, fixed income and FX, all with an eye on which themes will continue into and emerge from 2026.

The 12 Trades of Risk-mas: A 2026 Macro Outlook

The signal events and dominant narratives of 2025 have not had quite the advertised effects where global current account and capital flow trends are concerned. As Brad Setser, senior fellow at the Council on Foreign Relations, notes, tariffs raise revenue for the US but so far its external position relative to Asia has, if anything, worsened. De-dollarization has been an eye-catching idea that still has little basis in fact. The expected revaluation of currencies relative to the USD has been much more limited in scope than one might appreciate. These and many other threads are pulled together in a globe-spanning episode this week. 

The signal events and dominant narratives of 2025 have not had quite the advertised effects where global current account and capital flow trends are concerned. As Brad Setser, senior fellow at the Council on Foreign Relations, notes, tariffs raise revenue for the US but so far its external position relative to Asia has, if anything, worsened. De-dollarization has been an eye-catching idea that still has little basis in fact. The expected revaluation of currencies relative to the USD has been much more limited in scope than one might appreciate. These and many other threads are pulled together in a globe-spanning episode this week.&nbsp;

The US Dollar Downtrend: Dawn or Denouement?

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