Half-Time Report: How the FX Market Scored in H1 2026
With June nearly closed, it’s a natural moment to zoom out and score the first half of 2026 in FX.
The winners
The US dollar, first and unambiguously. EUR/USD ends June near 1.1438, down from around 1.17 in early May and trending lower since spring. USD/JPY at 161.45 is up nearly 2 yen from where the half began, carry traders having collected yield every single month. Against most of the G10 and the EM complex, the greenback’s first half has been a steady grind higher.
The yen deserves a special mention — not as a winner in level terms, but as the market’s most reliable funding currency. Anyone short yen and long anything else got paid this half.
The losers
The euro, clearly. Every rally above 1.17 was sold; every bounce died at a lower high. The single currency’s problem isn’t a crisis — it’s worse than a crisis, because crises get resolved. Stagnation just persists. GBP/USD at 1.3353 is down 250 pips from late May, a respectable performance relative to the euro but still a loser in dollar terms.
Three lessons from H1
One: rate differentials still run FX. Every major trend this half traced back to central bank divergence. Two: positioning beats prediction — the consensus trades (short yen, long dollar) worked precisely because they were consensus, until they suddenly won’t be. Three: the boring trades paid. Carry, not heroics.
H2 watchlist
The three things that could flip the H2 script: a genuine US slowdown, a Bank of Japan that finally moves, and European fiscal expansion large enough to move the growth needle. Two of the three are low-probability. Trade accordingly, but keep them on the dashboard — H2 has a habit of humbling H1’s winners.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
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