US August payrolls landed at 162,000 on Friday against a consensus near 56,000, with unemployment steady at 4.1% — the dollar index rebounded to roughly 99.3 and futures now price close to 60% for a September hike, which is the load-bearing assumption under our short GBP/USD. The RBNZ delivered its move to 2.75% on 2 September but republished a rate track barely changed from May, validating market pricing rather than beating it, so the New Zealand dollar shorts have already survived their own catalyst. The Bank of Canada held for a seventh consecutive meeting on the same day and does not reconvene until 28 October, which leaves the 138bp US-Canada gap with no scheduled mechanism to close it inside the window.
Sterling is the weakest currency in the G10 on both our horizons, and the market has parked the entire story on one Budget date in late October.
Three themes driving G10 FX
- Sequencing, not levels — The FOMC, MPC, BoJ and RBA all decide inside a single fortnight, and the tradeable edge is in pairs where one leg has a dated repricing opportunity and the other simply cannot answer.
- Transmission asymmetry — The euro area and the UK both printed 2.9% headline inflation in July, and one central bank is hiking on that number while the other has said it will look through it.
- Crowding that amplifies rather than offsets — Several of the best-scoring crosses have both legs positioned the same way, with the Australian dollar sitting at the 100th percentile in two of them, so the implied pair position is the consensus trade twice over.
Our top 3 trades
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Short GBP/USD The only G10 pair whose policy differential changes sign this month, with the Fed deciding on 16 September and the MPC on 17 September. Carry: −13bp against the position — functionally nil either way |
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Long EUR/GBP One bank moves on 10 September at 97% priced; the other has pushed its next move into 2027, with a gilt-Bund spread at 184bp underneath. Carry: −150bp — you pay to hold this one |
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Long SGD/CHF One central bank appreciates its currency as policy while the other caps its currency as policy, and no bank publishes the cross. Carry: +140bp — paid to wait |
On our radar
| Sep 10 | ECB decision with staff projections | Affects: EUR/GBP |
| Sep 15–16 | UK labour market report, then UK August CPI | Affects: GBP/USD, EUR/GBP |
| Sep 16–17 | FOMC with projections, then the MPC 24 hours later | Affects: GBP/USD, EUR/GBP |
| Sep 24 | SNB monetary policy assessment | Affects: SGD/CHF |
The 16–17 September pairing carries by far the highest asymmetry: two decisions 24 hours apart, only one of which comes with a projection round, and the Committee's own June median already implies the move that futures are still only two-thirds convinced by.
Carry snapshot
Carry is working across two-thirds of the book, but almost all of the quality is concentrated in one funding leg — the three best carry-to-volatility ratios we measure are all short Swiss franc, against a policy rate conditioned at zero through 2028, which means one volatility regime break takes out five positions simultaneously. Note that our two highest-ranked trades are not carry stories at all: in one the roll is functionally zero, in the other we are deliberately paying 150bp for a fundamental thesis, and both should be sized on that basis rather than on the roll.
Full analysis with all pair rankings, carry landscape, risk dashboard, and catalyst calendar available for Edge and Dossier members.