Summary of the Article: The FX Trader - USD Rally Will Need New Drivers If It Is to Continue

Author: John Hardy, Global Head of Macro Strategy

Date: June 25, 2026

Overview

The article discusses the recent rally of the US dollar (USD) against other G10 currencies, attributing this movement to a more hawkish stance from the Federal Open Market Committee (FOMC) and diminishing tightening expectations from other central banks. The author suggests that for the USD rally to sustain, new economic catalysts will be necessary, particularly in light of upcoming economic data and potential volatility in risk assets.

Key Points

• The USD has reached local highs against most G10 currencies, supported by the FOMC's hawkish adjustments.
• US treasury yields have remained stable, with expectations for a rate hike in September, while yields in other regions have declined.
• Comments from ECB President Christine Lagarde have tempered expectations for further ECB rate hikes, pushing them further into the future.
• The article raises concerns about the quality of US economic data under the new Fed Chair, Warsh, suggesting uncertainty in interpreting incoming data.
• The USD's safe-haven status was highlighted during a recent equity market sell-off, indicating its dual role in the current market environment.
• USDJPY has paused at a significant resistance level, with the Japanese Ministry of Finance remaining silent, leading to market speculation.
• The author emphasizes the importance of monitoring the EURGBP pair for insights into the potential political changes in the UK, particularly with the anticipated leadership of Andy Burnham.
• GBPCHF is highlighted as a currency pair with structural upside potential, driven by the overvaluation of the Swiss franc and the UK's need for economic transformation.

Market Dynamics

The article notes that the USD's strength is currently impressive, but questions how much further it can extend without new supportive data. The GBP is also discussed in the context of potential political changes that could influence its value against the euro and the Swiss franc.

Conclusion

In summary, while the USD has shown significant strength recently, the article suggests that its continued rally will depend on forthcoming economic data and the broader market environment. The potential political shifts in the UK could also play a crucial role in shaping currency dynamics in the near future.