Global FX weekly: Carry sweats

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Global FX weekly: Carry sweats

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Global FX weekly

Carry sweats

The View 29 May 2026

G10 FX. Oil vs rates tug-of-war continues for USD but hawkish Fed & strong US data FX Research

should prevail. Past the cyclical peak for AUDNZD. Global

EM FX. Supply chain and energy security implications are getting priced into inflation Table of Contents

and EM risk premiums, undermining FX carry trades.

Key views, forecasts and latest trades 2

G10 Themes Week ahead 3

USD. Kevin Warsh primer – USD can benefit if he moderates his dovish views. The view 4

G10 Themes 7

AUDNZD. Wider AU/NZ tax differentials could stem net migration and boost NZD

USD: Kevin Warsh Primer 7

FX rebalancing. Outflows from EM & to a lesser extent USD vs inflows into GBP, EUR AUD/NZD – could tax changes trigger a reversal? 8

& JPY. May FX Rebalancing 9

EM Themes 10

EM Themes Short USDTRY in 2m forward 10

TRY. Entry point is attractive: short USDTRY in 2m forward INR: Tug-of-war between RBI and markets 12

INR. India Rates: Tug-of-war between RBI and markets KRW: Robust tech cycle momentum 13

Technical Strategy 14

KRW. Robust tech cycle momentum to fuel above-trend growth in 2026 Trade Recommendations G10 16

Technical Strategy Trade Recommendations EM 18 World At A Glance Projections 21

DXY fading toward SMA support after filling its US-Iran ceasefire gap. Above the 200d

Research Analysts 26

SMA at 98.59 favors 100.38-100.64 and a weekly H&S base toward 102.86-103.

G10 FX Strategy

MLI (UK)

+1 646 855 9342

Adarsh Sinha

FX and Rates Strategist

+44 20 7995 9745

adarsh.sinha@bofa.com

Claudio Piron

Emerging Asia FI/FX Strategist

Merrill Lynch (Singapore)

+65 6678 0401

claudio.piron@bofa.com

Oliver Levingston

Merrill Lynch (Hong Kong)

+852 3508 4631

oliver.levingston@bofa.com