Now I have the research. Let me write the post.

The month in Global FX markets

Global FX markets in May 2026 were defined by two forces pulling in opposite directions: hawkish central banks defending inflation mandates, and a dramatic repricing of geopolitical risk as US-Iran ceasefire talks gained traction. The US Dollar Index closed May at 98.91, up 0.8% on the month — a modest grind higher that masked sharper moves underneath the surface.

The Swiss franc was the standout safe-haven bid. USD/CHF fell 0.9% to 0.7837, while EUR/CHF dropped 1.1% and GBP/CHF shed 1.2% — the largest G10 cross moves of the month. At the other end, the New Zealand dollar gained 1.8% against the greenback (NZD/USD to 0.5946), outperforming every other G10 currency. The commodity complex told a split story: copper surged 7.3%, but WTI crude collapsed 16.9% to $87.36 and Brent fell 19.3% to $92.05 — the sharpest monthly oil drawdown in years. Gold eased 1.2% to $4,560.50 as risk premiums compressed.

Winners and losers

The franc’s broad strength stood out. CHF gained against every G10 counterpart, with GBP/CHF (-1.2%) and EUR/CHF (-1.1%) leading the move. Japan’s yen was the other defensive winner on a relative basis — USD/JPY slipped 0.6% to 159.27, while the yen crosses told the real story: CAD/JPY fell 1.4%, GBP/JPY dropped 0.9%, and EUR/JPY shed 0.9%. Intervention rhetoric from Tokyo intensified through the month, with officials explicitly flagging readiness to act.

The Kiwi dollar’s 1.8% rally against the USD was the biggest G10 mover. NZD/JPY climbed 1.2% even as most yen crosses fell — a rare divergence that reflected New Zealand’s relatively clean positioning ahead of the RBNZ’s May 27 hold at 2.25%, where officials signalled rates would likely rise “sooner and by more” than previously projected.

The Scandinavians moved in lockstep with central-bank surprises. NOK strengthened 0.8% against the dollar (USD/NOK to 9.2445) after Norges Bank’s unexpected May 7 hike, while SEK gained 0.6% (USD/SEK to 9.2491) despite the Riksbank holding. The Canadian dollar weakened, with USD/CAD rising 0.8% to 1.3783 — oil’s collapse dragged the loonie lower even as the broader commodity complex held up.

What drove May 2026

Three macro forces dominated. First, the RBA hiked 25 basis points to 4.35% on May 5 — its third consecutive increase in 2026 — citing headline CPI at 4.6% and Middle East-driven energy pass-through. Norges Bank followed two days later with its own surprise 25bp hike to 4.25%, making May the most hawkish G10 month of the year so far.

Second, US data painted a stagflationary picture. April CPI printed at 3.8% year-over-year — the highest since May 2023 — with energy costs surging 17.9%. Meanwhile, Q1 GDP was revised down to 1.6% annualised from the initial 2.0% estimate, with consumer spending weaker than first reported. The combination gave the Fed no room to cut and no mandate to hike.

Third, US-Iran ceasefire negotiations emerged late in the month as the catalyst for the oil crash. Traders rapidly unwound the geopolitical risk premium that had kept crude elevated since the Strait of Hormuz disruption began in February. The prospect of Iranian barrels returning to market drove Brent down 19.3% — the single largest monthly move across any major asset class in May.

June 2026 outlook

June sets up as a month where central-bank policy divergence either widens or starts to compress — and the answer will come in a concentrated burst. The week of June 15-18 packs six rate decisions into four days: the BoJ (June 15-16), RBA (June 15-16), and Fed FOMC (June 16-17) overlap with the G7 Summit in Evian-les-Bains, followed immediately by the BoE, BoC, and SNB on June 18.

The ECB meets first on June 11, with market pricing reflecting roughly 80-90% probability of a hike after eurozone April CPI hit 3.0% — well above target. Norges Bank also decides on June 11. The BoJ is the other live meeting: its April decision drew a 6-3 vote split with three members pushing for a hike to 1.0%, and the June interim assessment of JGB purchase reduction adds another variable for yen traders. The Fed is expected to hold at 3.50-3.75%, boxed in by sticky inflation and softening growth.

Before the central-bank cluster, US nonfarm payrolls land on June 5 and May CPI prints on June 10 — the day before the ECB. UK CPI on June 17 arrives the day before the BoE decision. Each data point feeds directly into the rate decision that follows it. The ECB’s Sintra Forum (June 29-July 1) closes the month with speeches from governors that can shift forward guidance.

What we’re watching

BoJ June 15-16 and USD/JPY at 159.27. A hike to 1.0% would be Japan’s highest policy rate since 1995. Intervention risk is already elevated — any upside surprise resets the yen carry trade calculus across all JPY crosses.

ECB June 11 and EUR/CHF at 0.9133. A hike widens the EUR-CHF rate differential further, but the cross fell 1.1% in May despite the ECB’s hawkish lean — suggesting the franc bid is structural, not just rate-driven.

Oil and the Hormuz premium. If US-Iran talks produce a formal ceasefire framework in June, the commodity-linked currencies (CAD, NOK) face further pressure. If talks stall, the risk premium snaps back and the May oil decline partially reverses.

US CPI on June 10. April’s 3.8% print is the number the Fed will be measured against. A second consecutive acceleration closes the door on 2026 cuts entirely and shifts the conversation toward whether the next move is a hike.