Trump's 10-day extension of the Iran strike pause through April 6 dominated FX markets this week, briefly triggering a risk-on reversal on Monday before Iran's flat rejection of the US 15-point ceasefire plan re-established the safe-haven bid — a whipsaw that reinforced USD strength against our Short USD/SGD and Long AUD/USD positions. UK February CPI printed at 3.0% with services inflation at 4.3% on March 25, while core CPI unexpectedly edged up to 3.2% — deepening the BoE's stagflation trap and keeping our GBP weakness thesis firmly alive across GBP/JPY and GBP/CAD. The OECD's interim report, released this week, projected G20 inflation at 4.0% in 2026 (1.2 percentage points above prior expectations) and warned that Strait of Hormuz disruptions could produce "significantly worse outcomes" — a macro backdrop that continues to favour our JPY-bullish positioning. MUFG flagged that 2-year gilt yields have surged 100bp in 15 days — the largest such move since the Truss episode in 2022 — and questioned GBP's current relative outperformance as unsustainable, aligning squarely with our framework.
How our views are tracking
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Short NZD/JPY (+197 pips) — thesis strengthened The BoJ's January minutes revealed urgency on hiking, Shunto wage results are confirmed at 5.46%, and Japan's fiscal year-end on March 31 should catalyse further JPY repatriation flows — this remains our best-performing trade and the path to our 90–91 target is clearing. |
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Short USD/SGD (−147 pips) — invalidator approaching At 1.2886, we are just 14 pips from the 1.2900 two-week invalidation threshold — Iran's rejection of ceasefire terms and hawkish Fed repricing (markets now price zero 2026 cuts) have overwhelmed the MAS tightening catalyst we're waiting for. |
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Short GBP/AUD (−524 pips) — thesis intact, price action not The fundamental case (RBA at 4.10%, BoE frozen at 3.75%, gilt yields flashing Truss-era stress) has never been stronger, but the AUD leg has collapsed under 100th-percentile positioning unwind — the pair has already breached our downside case zone at 1.9200–1.9400. |
Invalidator watch
One invalidator has been triggered and one is on the doorstep. Our Long AUD/USD position has traded below the 20-day MA for over 15 consecutive sessions — well past the 3-day trigger threshold — and sits at 0.6880, inside the downside case range. This position requires formal review. Meanwhile, USD/SGD closed Friday at 1.2886, just 14 pips from the 1.2900 level that would start the two-week invalidation clock. All other invalidators — including GBP/CAD (UK services CPI at 4.3%, miles from the 3.5% trigger), NZD/JPY (BoJ explicitly preserved April optionality), and AUD/NZD (no RBNZ hike signal) — remain comfortably clear. The Brent-above-$110 watch for EUR/SGD requires ongoing monitoring as Strait of Hormuz shipping remains disrupted.
Next week
| Mon Mar 31 | Eurozone CPI flash (March) | Affects: EUR/SGD, EUR/JPY, EUR/USD |
| Mon Mar 31 | Japan fiscal year-end repatriation | Affects: NZD/JPY, EUR/JPY, GBP/JPY |
| Tue Apr 1 | Japan Tankan Q1 + China NBS PMIs | Affects: AUD/USD, NZD/JPY, EUR/JPY |
| Wed Apr 1 | US ISM Manufacturing PMI | Affects: USD/SGD, AUD/USD, EUR/USD |
| Fri Apr 3 | US Nonfarm Payrolls (March) | Affects: all USD pairs |
The March Eurozone CPI flash on Monday is the week's highest-asymmetry event for our book — if it captures the first month of energy-shock passthrough and prints well above the prior 1.9%, it would validate ECB hawkish repricing and create a headwind for our Short EUR/SGD and Short EUR/JPY positions, while a softer print could finally reverse the EUR bid that has challenged us since March 19.
Full bilateral analysis for all 31 pairs — including conviction ladders, invalidation triggers, and scenario targets — available for Edge and Dossier members.
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