EUR/USD: It is about rates, more than growth – SocGen

FXStreet Insights Team FXStreet

The Dollar ekes out modest gains from US exceptionalism. Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes FX market outlook.

Correlation between FX and rate differentials remains strikingly strong

Another week started with a barnstorming US data point, ISM services coming in strong, and the employment index, which was worryingly weak a month ago, bouncing right back. US exceptionalism is in fine fettle. Meanwhile, another Wednesday means another lousy German industrial production report. It was sunny in Munich and it’s raining in Frankfurt, but gloom about the economic outlook is the same in both cities.

In the FX market, this all translates into a slightly stronger Dollar, but the correlation between FX and rate differentials remains strikingly strong, so if strong data don’t move Fed expectations much, they won’t have as big an FX impact as they might otherwise.

US yields have risen slightly more in the last week than European ones, and EUR/USD is lower, but not that dramatically. If we are in thrall to rates, the medium-term question is still whether the Fed eases by more than the ECB, rather than how strong the US economy is.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD picks some pace, retests 1.1670

EUR/USD advances modestly and revisits the 1.670 zone on turnaround Tuesday. The pair’s slight advance comes after two daily drops in a row and follows the humble decline in the US Dollar, while investors gear up for upcoming US data and the Jackson Hole Symposium.

Gold treads water around $4,650

Gold navigates the middle of its daily range near $4,650 per troy ounce on Tuesday. The lack of clear direction in the yellow metal comes on the back of the widespread cautious tone among market participants, a mildly offered stance in the US Dollar and a marked decline in US Treasury yields across the curve.

Crypto Today: Bitcoin soars past $80K as Ethereum and XRP hold gains

Bitcoin (BTC) is trading above $80,000 on Tuesday. This is the highest level the Crypto King has traded since mid-May, underscoring a positive shift in investors' risk-on sentiment, liquidity conditions and the technical outlook.

Nvidia earnings: A quick look at expectations

The 2026 Q2 earnings season is nearly over for S&P 500 members, with the reporting cycle notably positive. But looming large this week is none other than AI-favorite NVIDIA (NVDA) , whose results will wrap up the reporting cycle for the Magnificent Seven group as well.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.