FX Outlook: Ten questions (and answers) on currencies in 2H26

Research evidence excerpt

FX Outlook: Ten questions (and answers) on currencies in 2H26

Meera Chandan AC (44-20) 7134-2924 Patrick R Locke (1-212) 834-4254 Global Markets Strategy J P M O R G A Nmeera.chandan@jpmorgan.com patrick.r.locke@jpmchase.com

J.P. Morgan Securities plc J.P. Morgan Securities LLC 19 June 2026

Arindam Sandilya AC (65) 6882-7759 James Nelligan (44-20) 3493-6829

arindam.x.sandilya@jpmorgan.com james.nelligan@jpmorgan.com

JPMorgan Chase Bank, N.A., Singapore Branch J.P. Morgan Securities plc

Figure 20: Carry prospects of G10 high-beta laggards (NZD, SEK, JPY) policy forecasts for 100bp of tightening to 1Q27. Perfor-

are not projected to improve even over the 1-year horizon, which will mance in 2Q was thwarted by the US rate momentum fac-

limit mean reversion tor (Figure 24FedrepricinghasbenthedominantdriverofrecentdriverofNZDreturnsRolingTStatofgiveninputwithrespecttoNZD/USD3mreturnsJ.P.Morgan.Greyisregionofstatisticalnon-significance.StatisticalysignificantpositivemeanspositivebetatoNZDFXreturns,negativemeansnegativebeta.) which has less upside from here, while the

RBNZ’s Hawk Dove Score (HDS) is near the top of the

G10 and should be relatively stable entering a hiking

cycle. NZD rates are also richest in G10 relative to our

HDSs models (see Figure 4 here), leaving scope to

reprice. Relative performance in the Antipodeans is still

likely to be dollar-directional in the context of a global

supply shock: benign resolution of the Middle East/oil

shock should support global growth and take some CBs

back from the brink, while boosting rate spread outlooks

for those who had a reason to hike pre-February, like the

RBNZ. This supports reversal in AUD/NZD to the mid

1.10s. An uglier, more USD-positive outcome (stickier

inflation, and/or more hawkish Fed) means lower targets