Lee Hardman, Senior Currency Analyst, and Abdul-Ahad Lockhart, Currency Analyst, discuss what has been driving a weaker USD over the past week. In addition, they discuss if recent GBP outperformance will continue now that Andy Burnham has been confirmed as the new Labour leader.

Why have higher energy prices failed to trigger a stronger USD?

The MUFG Global Markets Podcast

Welcome to the MUFG Global Markets FX Week Ahead Podcast with Derek Halpenny, Senior Currency Analyst. It's Friday, 17th July, 2026. And joining Lee to pose some questions on the financial market themes for the week ahead is Abdullahad Lockhart, Currency Analyst. This material is only intended for professional investors in jurisdictions in which its use is permitted under applicable laws, rules and regulations.

It has been produced for information purposes only and should not be construed as investment research or advice. MUFG EMEA disclaimers and disclosures can be located on our website. Hi Lee. Hi, Abdullahad. So the dollar has continued to correct lower over the past week. What has been the main drivers? Yeah, like you said, over the last couple of weeks, the dollar has definitely lost some upward momentum.

And like you say, we've seen the dollar index kind of moving back towards support closer to the 100 level over the past week. To us, the kind of main driver really has been the disappointing kind of US data where we saw clear evidence of much softer US inflation in the month of June.

It was obviously widely expected that headline inflation would slow because gasoline prices had fallen on average by about 10 percent in the month of June, which obviously helped bring down headline inflation. But I think the biggest surprise really was the, I guess, the broader evidence of disinflation pressure. So if we look at core inflation, for example, that was flat month on month. I think that was the biggest downside surprise since May of last year.

Why have higher energy prices failed to trigger a stronger USD?

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Why have higher energy prices failed to trigger a stronger USD?

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.