Americas FX Morning Bullets 12 May 2026

Research evidence excerpt

Americas FX Morning Bullets 12 May 2026

12 May 2026

Americas FX Morning Bullets CurrenciesGlobal

◆ UK FX, bonds and equities weaken on political uncertainty Daragh Maher

Head of Digital Assets Research, Sr FX Strategist

◆ USD gains on geopolitical risk aversion; US CPI data ahead HSBC Bank plc

daragh.maher@hsbc.com

+44 20 7991 8888

◆ Japan and US offer aligned messaging on FX intervention

Clyde Wardle

Senior EM FX Strategist

GBP is weaker alongside declines in prices for UK bonds and equities as UK HSBC Securities (USA) Inc.

clyde.wardle@us.hsbc.com

political uncertainty rises. PM Starmer has told his cabinet this morning that he +1 646 610 3260

intends to stay on, yet his speech yesterday has failed to prevent growing calls from Tom Wookey

within the Labour Party for him to step aside or at least provide a timeline to a European FX Strategist

HSBC Bank plc

leadership succession. The market is headline chasing for now but the lines of thomas.wookey@hsbc.com

demarcation for FX are already becoming clearer. First, the longer the uncertainty +44 20 79913367

persists, the greater the likely downside for GBP. Thus, a leadership contest that is

delayed to allow Andy Burnham, the current favourite to replace Starmer according to

prediction markets, to be included in a leadership vote could be GBP negative.

Second, progress for candidates who appear more likely to retain fiscal discipline

could see GBP rise, but those more in favour of looser policy could see GBP weaken.

For example, today a group of 100 left-leaning Labour MPs, the Tribune Group,

called for less fiscal caution in policy (The Times).

The USD is stronger amid renewed geopolitical risk aversion and ahead of

today’s US CPI release. The mixed signals on the Middle East stalemate continue,