Citi‘s Most Read - North America

Research evidence excerpt

Citi‘s Most Read - North America

Veronica Clark | Andrew Hollenhorst

Foreign Exchange Forecasts - June 2026

Flagship

We lower our 0-3m EURUSD forecast to 1.13 to reflect USD-positive asymmetry

around upcoming data and Fed pricing, as well as potential for momentum chasing

on the bullish DXY break. In such a scenario, EURUSD could overshoot our near-

term forecast towards 1.10. However, we think it will be difficult for USD gains to

sustain unless the Fed delivers on hikes or the ECB pivots towards cuts – neither is

a base case for now. Therefore, we leave our 6-12m EURUSD forecast unchanged

at 1.14, as USD may marginally correct lower if Fed hikes need to be priced out. This

should still see the USD range shift higher, potentially from 96-101 on DXY to 100-

103. More broadly, the low vol environment may persist through the summer,

especially with US equity earnings around the corner. This makes re-entry into

EMFX carry attractive, in our view, with EUR and CHF preferred funders.

Daniel Tobon | Osamu Takashima | Brian Levine | Yuanliu Hu | Xiangrong Yu

US Equity Strategy - SIGN (Sector & Industry Group Navigator): Back to

Broadening

US Equities have posted a strong Q2 with the S&P 500 +13% as of this writing.

Strength in the AI trade stands out with the NDX +23%. Our Q2 SIGN playbook

outperformed by 254bps. We opportunistically reduce our Info Tech overweight

while positioning for a cyclically led broadening call during Q3. The Mag 8 have

been trading idiosyncratically all year. Semi earnings momentum is undeniable but

creates an eventual playbook where it is difficult to see how everyone in AI/Tech

path wins. For now, we expect weaker oil prices to read through to less inflation

concern during Q3, giving more impetus for positioning to broaden.