FX Daily: Volatile truce in Daily Currencies Ratings 09/04/2026 USD: Fed minutes highlight dual risks Higher‑beta and carry currencies have led the rebound against the dollar since the ceasefire announcement. Beyond their natural sensitivity to the equity rebound, FX investors may be positioning for a gradual return to conditions of lower volatility, which tend to favour carry and EM FX, alongside some stickiness in energy prices to which some high-beta currencies are positively exposed. We suspect this preference for higher‑beta currencies over lower‑beta, more liquid alternatives such as EUR, GBP and JPY can persist as long as markets are not given a reason to question the de-escalation narrative. Iran said yesterday that the ceasefire had been violated, helping the dollar recover a small portion of losses. That serves as a reminder that the situation remains highly uncertain and that small bouts of re‑escalation are still possible even if the conflict moves towards a broader resolution. On the macro side, the Federal Reserve minutes yesterday caused a small hawkish reaction – with swap rates now embedding only 7bp of easing by year-end after touching 15bp earlier yesterday. The main highlight of the minutes, in our view, was however the reinforcement of two-side risks stemming from the war, with faster cuts discussed as an option should job losses outpace inflation. We see room for dovish repricing in Fed expectations from here – a dollar negative. Today, there are some US data releases to watch. February core PCE inflation is expected to come in close to 0.4% month-on-month, though it is largely pre‑war and therefore of limited relevance. Jobless claims remain interestingly low, and the question is whether a delayed pick‑up finally materialises in one of the coming weeks. Personal income figures are also pre‑war, and the third estimate of 4Q GDP should have little market impact. Headline trading still dominates. Evidence that traffic through the Strait of Hormuz is picking up could add pressure on the dollar, but a more durable move would likely require signs that the ceasefire evolves towards a lasting arrangement. Otherwise, markets may start to grow nervous again once the two‑week ceasefire nears expiry. Francesco Pesole ECB: Sticky ECB pricing can help This is not an environment for outright EUR strength given investors’ preference for higher‑beta currencies. Still, European Central Bank pricing could give the euro more durable support than elsewhere. While falling energy prices have driven a dovish repricing in the EUR swap curve, markets continue to discount around 58bp of tightening by year‑end. We doubt that a modest further decline in energy prices alone would be enough to push ECB pricing below 50bp. Rate cycles at the ECB are typically framed around two 25bp moves or nothing at all, meaning a material dovish shift would likely require explicit guidance rather than just lower oil prices. With no permanent ceasefire in place and uncertainty around oil flows persisting, the ECB is unlikely to rush towards a decisively dovish narrative. That could prompt the euro to outperform other currencies (like USD) where pricing appears to be more flexible on the dovish side. A jump to 1.180 seems a bit premature given lingering volatility in the Gulf, but sticky ECB hawkish bets favour a return to the 1.170-1.173 area in EUR/USD. Francesco Pesole GBP: Downside risks vs EUR We struggle to see much downside potential in EUR/GBP following