The Currency Exchange - An FX Podcast by NatWest

In this special crossover episode of Currency Exchange and Bondcast, host Imogen Bachra is joined by Brian Daingerfield and Ross Walker to explore the market implications of the upcoming UK Budget and US mid-term elections.

The discussion examines the UK’s fragile fiscal position, expectations for borrowing and gilt issuance, and the growing likelihood of a Bank of England rate hike. The guests also assess the potential outcome of the US midterms, considering what a Democratic victory in Congress could mean for fiscal policy, Federal Reserve appointments and geopolitical risks.

Key takeaways

The UK Budget is expected to be cautious, with limited scope for major policy changes
The government faces tight fiscal constraints, pressure from higher borrowing costs and limited room for manoeuvre under its existing fiscal rules. Ross expects a largely holding-operation Budget, with targeted support for energy costs and relatively modest tax increases. The implications for markets are likely to be limited unless the borrowing outlook or debt issuance plans disappoint expectations.

The UK’s fiscal position remains fragile despite improved market sentiment
Markets have become more comfortable with the UK’s fiscal outlook, but the underlying challenges remain significant. Public debt is high, debt-servicing costs are elevated and the promised fiscal consolidation remains heavily backloaded. The Budget could remind investors that the government has limited room to respond to future economic shocks.

Gilt issuance plans could disappoint markets expecting a significant shift towards shorter maturities
Investors are anticipating that the UK Debt Management Office will reduce the proportion of long-dated gilt issuance and potentially increase Treasury bill issuance. However, changes may be incremental rather than substantial. Market expectations have moved ahead of what the Budget is likely to deliver, potentially limiting the recent outperformance of gilts.

Democrats are strongly favoured to win the US House of Representatives, but the Senate remains competitive
Historical mid-term election patterns and polling suggest Democrats have a significant advantage in the House. The Senate is a closer contest, with Democrats needing a net gain of four seats to secure a majority. The outcome matters particularly for the confirmation of Federal Reserve appointments.

The US midterms are unlikely to trigger a major shift in economic policy
Even if Democrats win control of Congress, President Trump will retain considerable influence over trade and foreign policy. A Democratic victory could constrain the scope for additional fiscal stimulus, but it is unlikely to produce a decisive shift towards fiscal consolidation.

Markets should be able to assess the US election result relatively quickly
Although the final count may take longer, Brian expects the early results from key congressional races to provide a reasonably clear indication of the likely outcome. This should allow markets to price the result without a prolonged period of uncertainty.

Host: Imogen Bachra, Head of Economics and Markets Strategy
Guests: Brian Daingerfield, Co-Head of G10 FX
Ross Walker, Chief UK Economist & Co-Head of Global Economics at NatWest

This episode was recorded on 21 October 2026.

You can also find this episode of Bondcast on Spotify and Apple Podcasts. 

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European political and fiscal uncertainty continues to dominate currency markets, with France at the centre of investor concerns. In this episode of Currency Exchange, Brian Daingerfield is joined by Paul Robson to explore how rising government borrowing costs, elevated energy prices and competition for global savings are shaping the outlook for major currencies.

Highlights:

* France remains central to the euro outlook: A year-end budget agreement could ease political uncertainty and help reduce the risk premium embedded in the currency.
* The global cost of capital is rising: Government borrowing and investment in AI are competing for limited savings, putting upward pressure on bond yields.
* The ECB is unlikely to intervene without broader contagion: Policymakers will want to see evidence of financial fragmentation spreading beyond France before considering direct action.
* The dollar continues to benefit from European uncertainty: While US monetary policy remains important, developments in Europe are a major driver of recent dollar strength.
* Sterling is benefiting from relative stability: The UK currency has gained ground against the euro, although the upcoming Budget and higher energy costs remain important risks.

Host: Brian Daingerfield, Co-Head of G10 FX Strategy
Guest: Paul Robson, Co-Head of G10 FX Strategy

You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.

This episode was recorded on 8 October 2026.

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In this episode of Currency Exchange, Brian Daingerfield and Paul Robson examine what is driving the dollar higher, why sterling has held up surprisingly well and why the euro is coming under increasing pressure from political and fiscal concerns in France.

Key themes:

* A perfect storm for the dollar: Rising energy prices, tighter financial conditions and higher US real yields have helped push the dollar towards the top of its 2026 trading range.

* Energy concerns broaden: The market focus has moved beyond crude oil to refined products, diesel and natural gas, with European gas stockpiles becoming increasingly important as winter approaches.

* Fiscal pressure intensifies: Rising long-term yields and elevated debt levels are creating challenges across the US, UK, France and Japan, although the impact on currencies varies depending on relative performance.

* Why FX volatility remains contained: Bond markets have experienced much larger moves than currencies. With yields rising broadly across economies, there has been less of the divergence that typically drives major FX moves.

* Sterling proves resilient: Despite a sharp rise in UK gilt yields, sterling has held up relatively well against its major peers, supported by a more resilient UK economy, equity inflows and relatively stable gilt performance.

* The UK budget comes into focus: With the 28 October Budget approaching, markets will be watching fiscal rules, borrowing plans, investment spending and the government’s ability to maintain confidence in the public finances.

* Pressure builds on the euro: The euro faces a challenging combination of French fiscal and political uncertainty, widening French-German bond spreads and a stronger US dollar.

* France in focus: The widening spread between French and German government bond yields is an increasingly important indicator of sentiment towards the euro area.

* Could US safe-haven status change? While the dollar is currently benefiting from its traditional safe-haven role, rising US yields and concerns over debt, deficits and policy raise longer-term questions about the status of US assets.

Host: Brian Daingerfield, Co-Head of G10 FX Strategy
Guest: Paul Robson, Co-Head of G10 FX Strategy

You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.

This episode was recorded on 1 October 2026.

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As markets emerge from the summer, higher global yields, elevated energy prices, shifting central-bank expectations and changing investor positioning are creating a complex backdrop for currencies.

In this episode of the Currency Exchange, Brian Dangerfield and Paul Robson assess why FX markets have remained surprisingly restrained despite major moves elsewhere, and explore what could drive currencies through the final months of 2026.

Key takeaways:

- Higher yields and energy prices are reshaping the global backdrop

- Central banks are facing increasingly divergent challenges

-Sterling has shown remarkable resilience – but UK fiscal risks are building

- European politics could become a bigger driver of euro-dollar

-The yen’s rally may be more about positioning than fundamentals

Host: Brian Daingerfield, Co-Head of G10 FX Strategy

Guest: Paul Robson, Co-Head of G10 FX Strategy

You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.

This episode was recorded on 10 September 2026.

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A remarkable week in FX markets saw the US Treasury join Japan’s intervention to support the yen – the first co-ordinated US currency intervention in around three decades. Eimear Daly and Brian Daingerfield discuss why Washington took the unprecedented step, what it signals for US-Japan relations, and why intervention alone is unlikely to solve the yen’s structural challenges.

The discussion also explores China’s changing role in the global economy. After years of exporting deflation, China is now exporting higher prices in key sectors as policymakers encourage manufacturers to move up the value chain. 

Highlights:

* A historic intervention: The US Treasury joined Japan’s yen intervention for the first time in around 30 years, signalling strong political and strategic support for Japan.

* Intervention can only go so far: While coordinated intervention can stabilise markets in the short term, lasting yen strength will require changes in economic fundamentals, particularly Bank of Japan policy.

* Japan faces a policy balancing act: The government wants to support growth through fiscal stimulus, but markets are looking for tighter monetary policy and reassurance over Japan’s fiscal outlook.

* Rate differentials are no longer the whole story: Although narrowing US-Japan interest rate spreads should support the yen, investors are increasingly focused on fiscal policy and the outlook for Japanese government debt.

* China’s export model is evolving: Chinese manufacturers are shifting away from competing on price towards higher-value, higher-margin products, supported by industrial policy.

* China may no longer be exporting deflation: Rising export prices suggest China is beginning to export inflation instead, with potentially important consequences for global inflation and central bank policy.

* Industrial policy is reshaping global trade: Beijing is using tax policy, currency appreciation and targeted incentives to push manufacturers up the value chain and reduce reliance on low-cost exports.

* Replacing China’s low-cost manufacturing won’t be easy: Few economies have the scale or policy tools to replicate China’s manufacturing model, suggesting higher production costs could become a structural feature of the global economy.

Host: Eimear Daly, Emerging Markets Macro Strategist

Guest: Brian Daingerfield, Co-Head of G10 FX Strategy

This episode was recorded on 6 August 2026.

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This week on Currency Exchange, Eimear Daly is joined by Paul Robson and Brian Daingerfield to assess a pivotal week for global central banks and currency markets. They unpack the Bank of England’s policy decision to hold the base rate, analyse the market’s reaction to the Fed under Chair Kevin Warsh, discuss suspected Japanese FX intervention, and examine China’s latest signals for global growth and trade.

Key takeaways: 

* The Bank of England’s communication was interpreted as more dovish than its vote suggested.

* Sterling remains more sensitive to UK fiscal policy than interest-rate expectations.

* Suspected Japanese FX intervention highlights authorities’ concern over yen weakness but does not alter the longer-term fundamentals.

* Markets continue to grapple with uncertainty over the Federal Reserve’s reaction function under Chair Kevin Warsh.

* China’s leadership remains focused on gradual, fiscally-led support while prioritising strategic industries over broad consumer stimulus.

Host: Eimear Daly, Emerging Markets Macro Strategist

Guests: Brian Daingerfield, Co-Head of G10 FX Strategy

Paul Robson, Co-Head of G10 FX Strategy 

This episode was recorded on 30 July 2026.

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This week, Brian Daingerfield and Paul Robson take a whistle-stop tour of major currencies ahead of a flurry of central bank policy decisions next week.

Key takeaways

* Rising oil prices have become the primary driver of FX markets.
* Markets increasingly expect further rate hikes across several major economies.
* The ECB remains on course for possible tightening if energy prices stay elevated.
* The Bank of England’s debate centres on timing rather than direction.
* Fiscal credibility will be an increasingly important factor for sterling.
* The Federal Reserve is likely to provide little forward guidance despite hawkish market pricing.
* Structural reforms, rather than intervention alone, may ultimately determine the yen’s outlook.

Host: Brian Daingerfield, Co-Head of G10 FX Strategy
Paul Robson, Co-Head of G10 FX Strategy

You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.

This episode was recorded on 23 July 2026.

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This week, Brian Daingerfield and Paul Robson discuss yet more sterling outperformance. While UK rates continue to support the currency, the discussion focuses on politics and fiscal credibility as the dominant drivers for sterling over the coming months.

The pair also examine softer-than-expected US inflation data, asking whether this could mark a turning point for Federal Reserve expectations and the US dollar. Finally, they explore developments in Japan, where policymakers are considering ways to encourage domestic investment in government bonds—potentially creating longer-term support for the yen. 

Key takeaways:

* Political and fiscal developments remain the dominant influence on sterling, with the Autumn Budget likely to become the next major catalyst.

* NatWest’s Bank of England outlook remains unchanged despite recent geopolitical developments.

* Softer US inflation could represent an important shift in the macro narrative if confirmed by future data releases.

* Markets may have become too optimistic on the US dollar after several months of strong economic surprises.

* Japan appears to be exploring longer-term structural measures to support its bond market and currency, rather than relying solely on foreign exchange intervention.

Host: Brian Daingerfield, Co-Head of G10 FX Strategy

Paul Robson, Co-Head of G10 FX Strategy

This episode was recorded on 16 July 2026.

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Markets may look calm, but beneath the surface FX risks are building. In this episode of The Currency Exchange, Brian Daingerfield and Paul Robson unpack sterling’s surprising resilience, the political and fiscal risks waiting in the autumn, why the dollar’s rally may be running out of fresh fuel, and what Japan’s tolerance of yen weakness could signal for global markets. 

They discuss:

• Why sterling continues to defy bearish expectations, helped by yield support, possible safe-haven flows and renewed UK equity inflows.
• How UK politics, fiscal rules and gilt supply could become bigger risks for sterling later in the year.
• Why French political risk is worth watching, even if markets are not fully pricing it yet.
• How Middle East tensions and oil prices are feeding into dollar positioning and broader risk sentiment.
• Why the dollar has stayed resilient despite crowded positioning, stronger US data and shifting Fed expectations.
• Why NatWest expects a slower, later dollar decline through the second half of the year.
• What the lack of confirmed Japanese FX intervention may reveal about official tolerance for yen weakness.
• Why Japan’s fiscal and monetary mix remains a major headwind for the yen.

Remember to hit subscribe so you can listen to the latest episodes in this series as soon as they're available and get our views on the big themes and events moving markets and shaping the economy.

This episode was recorded on 9 July 2026.

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This week on Currency Exchange, the team discusses the market implications of the first Federal Reserve meeting under Chair Kevin Warsh, the outlook for the US dollar following a hawkish shift in Fed expectations, the Bank of Japan’s widely anticipated rate hike, and growing concerns about potential Japanese FX intervention.

Key takeaways

* The first Fed meeting under Kevin Warsh was interpreted as hawkish, largely because Warsh declined to counterbalance a more hawkish committee message. 

* The FOMC dot plot surprised markets, with half of participating members projecting rate hikes in 2026 and several favouring multiple increases.

* NatWest no longer expects Fed rate cuts this year, providing near-term support for the US dollar, although markets may still be overpricing tightening risks.

* The Bank of Japan’s rate hike to 1.0% was fully anticipated and had little market impact, partly due to Governor Ueda’s absence and limited forward guidance.

* Japanese intervention risks remain elevated as USD/JPY stays near multi-decade highs, but Japan’s accommodative fiscal and monetary policy mix continues to argue for underlying yen weakness.

Host: Eimear Daly (Emerging Markets Macro Strategist)

Guest: Brian Daingerfield (Co-Head of G10 FX Strategy)

You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.

This episode was recorded on 18 June 2026.

For any terms used please refer to this glossary https://www.natwest.com/corporates/insights/markets/glossary.html

Please view our full disclaimer here: https://www.natwest.com/corporates/disclaimer.html