Global FX Strategy_FX Compass_ EUR still underpricing tariff risk
Counterpoint Research·2025-02-09 04:54
Global FX Strategy FX Compass: EUR still underpricing tariff risk Figure 1: Breakevens diverge vs oil and point to inflationary risks of tariffs 1.80 1.90 2.00 2.10 2.20 2.30 2.40 2.50 2.60 2.70 2.80 60 65 70 75 80 85 90 95 100 Feb-23 Apr-23 Jun-23 Aug-23 Oct-23 Dec-23 Feb-24 Apr-24 Jun-24 Aug-24 Oct-24 Dec-24 WTI crude oil, 1st contract ($/bbl) US 5-year inflation breakeven (%, rhs) Source: Bloomberg, UBS Fears of US tariffs have driven a surge in realized FX volatility this week, but so far have had limit ...