Goldman Sachs says FX markets are moving from the 'de-escalation rebound' into the phase of digesting the energy shock
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Goldman Sachs says FX markets are moving from the 'de-escalation rebound' into the phase of digesting the energy shock
The report argues that the dollar may receive selective support in the second phase, while EM FX performance will shift from risk-appetite leadership to divergence driven by trade conditions and energy dependence.
- The dollar still moves in step with headline sentiment, but Goldman expects market attention to shift to the economic fallout from the conflict and constrained energy flows; current accounts in several Asian economies could deteriorate meaningfully, creating selective support for USD.
- EM FX rebounded sharply after the ceasefire news, but subsequent divergence will depend more on trade conditions: BRL, MXN, MYR and CNY are relatively better supported, while PHP, THB and INR remain under pressure.
- Long-term headwinds to the dollar's reserve-currency status remain, but the report stresses that cyclical factors matter more over the investment horizon; an energy shock is unlikely to trigger a disorderly dollar sell-off like last year.
- HUF is more symmetrical in the short term around the Hungarian election result, but the medium-term bias is for appreciation; if the outlook for EU fund disbursements improves, HUF still has room to rise further.
- For sterling, Goldman believes that expressing downside risk in GBP/USD is now a better tool than a tactical long in EUR/GBP; the Swiss franc may be supported by a rebound in gold prices and by SNB tolerance for appreciation.
Report interpretation
Overview
This is a global FX strategy report published by Goldman Sachs on 2026-04-10, titled 'Digesting De-escalation'. The report focuses on USD, EM FX, USD reserves, HUF, GBP and CHF, with the central backdrop being the rebound in risk appetite after a ceasefire or de-escalation, alongside macro constraints from still-limited energy flows through the Strait of Hormuz and energy prices that are unlikely to fully return to pre-conflict levels.
Core views
The report's core view is that FX markets have already gone through the first phase of risk-appetite and positioning repair, and will now move into a second phase in which economic shocks, trade conditions, energy import dependence, external balances and policy management capacity determine currency performance. Goldman expects the dollar to have modest appreciation room versus some energy-dependent currencies; it is constructive or relatively constructive on BRL, MXN, MYR, CNY and medium-term HUF, while remaining bearish on PHP, THB and INR. A tactical downside expression in GBP/USD is seen as a better re-escalation hedge, while CHF is supported by firmer gold prices and by SNB tolerance for appreciation in the context of inflation risks.
Analysis framework
The report uses a macro FX strategy framework that combines risk-appetite shocks, trade-condition changes, energy import dependence, external-balance pressures, policy intervention, reserve-currency inertia and event risk. It compares the 2022 energy shock, 2025 policy uncertainty and FX reactions after Poland's 2023 election to assess the persistence and relative direction of this round of shocks across different currencies.
Methodology notes
Separate the risk-appetite rebound triggered by the ceasefire news from the fundamental pressure caused by energy prices, import dependence and trade-condition changes.
The report argues that the initial rebound was mainly driven by risk beta and positioning, but trade-condition divergence will matter more afterward, with energy exporters or currencies facing fewer energy constraints enjoying relative advantages.
Restricted energy flows and persistently high energy prices worsen external balances for energy-importing economies.
Goldman expects current accounts to deteriorate significantly in several Asian energy-importing economies, putting greater pressure on currencies such as INR, PHP and THB.
Long-term strategic alliances and policy uncertainty affect the dollar's reserve-currency status, but large reserve managers lack sufficiently deep and substitutable alternatives.
The report acknowledges marginal long-term headwinds to the dollar's role, but emphasizes that USD-denominated GCC trade, exchange-rate regimes and the depth of global capital markets still limit rapid de-dollarization.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- USDSelective beneficiary
- Strengths
- The United States is more energy self-sufficient, and the economic impact of the energy shock may be greater elsewhere; cyclical forces support USD in the short term.
- Weaknesses
- US policy uncertainty and shifts in global strategic alliances may create long-term headwinds.
- Comparison
- The report sees the 2022 energy shock as a better reference point for the persistence of FX impacts in this round than 2025 policy uncertainty.
- Risks
- If energy flows recover quickly, risk appetite keeps improving, or return expectations on US assets deteriorate, USD support could fade.
- EM FXInternal divergence
- Strengths
- BRL, MXN, MYR and CNY are supported by energy-export, trade-condition or valuation factors.
- Weaknesses
- PHP, THB and INR are weighed down by energy-import dependence, external-balance pressures and weaker growth prospects.
- Comparison
- The first rebound after the ceasefire was mainly explained by risk beta and prior declines; the next phase will be explained more by trade conditions.
- Risks
- If energy flows through the Strait of Hormuz remain subdued, some of the energy-import currencies that have already rebounded could give back gains.
- HUFShort-term event driven, medium-term appreciation bias
- Strengths
- An opposition victory and improved prospects for EU fund disbursements could improve the external balance and support HUF; relatively high real rates and a decent external-balance starting point also enhance resilience.
- Weaknesses
- Recent appreciation and increased long positioning make the short-term reaction more symmetrical.
- Comparison
- The report references PLN's move after Poland's 2023 election, but believes the potential impact of policy change in Hungary could be larger.
- Risks
- If EU funds remain frozen, EUR/HUF could jump higher in the short term and HUF would come under pressure.
- GBP/USDSuitable as a downside hedge for re-escalation
- Strengths
- If the situation de-escalates further, sterling's high-beta characteristics could drive gains.
- Weaknesses
- Domestic UK factors, including labor-market fragility, political and fiscal risk premia, slowing data, room for BoE easing and local-election risks, could all weigh on sterling.
- Comparison
- The report thinks GBP/USD downside is now the more appropriate expression, rather than the earlier preference for long EUR/GBP.
- Risks
- If the energy shock eases and UK domestic risks do not come back into focus, the risk-reward profile of a GBP/USD downside trade will deteriorate.
- CHFSupported
- Strengths
- Persistent inflation risks may make the SNB more tolerant of CHF appreciation; a rebound in gold prices improves Switzerland's trade conditions and supports CHF.
- Weaknesses
- The current inflation starting point is low, which means the threshold for direct SNB support for the franc is relatively high.
- Comparison
- The report compares the current EUR/CHF path with the logic behind Swiss franc appreciation during the 2022 energy shock.
- Risks
- If gold prices fall back or risk appetite continues to improve while inflation pressures ease, CHF support could weaken.
Key data
- Report date2026-04-10The front page marks this as Economics Research 10 April 2026 | 10:02PM BST.
- Main coverage themesUSD, EM FX, USD Reserves, HUF, GBP, CHFThese are listed on the front page as the main discussion areas.
- USD 3-month outlookModest appreciation against energy-dependent currencies such as INR, PHP and THBThe report says the 3-month forecast shows some modest appreciation room for USD versus selected energy-dependent currencies.
- Key eventsThe 2026-04-08 ceasefire announcement; the first trading day after Hungary's 2026-04-13 electionThe report discusses the EM FX rebound after the 2026-04-08 ceasefire announcement and the impact of the weekend election in Hungary on HUF.
- Sterling strategy expressionA tactical downside in GBP/USD is preferable to a tactical upside in EUR/GBPThe report argues that, in the context of an energy shock, downside risk in sterling is better expressed through Cable.
- Key CHF driversRising gold prices, persistent inflation risk, and the SNB's tolerance for CHF appreciationThe report says gold prices have become more important in explaining EUR/CHF returns recently, and higher gold prices support CHF.
Impact & implications
For investors, the report cautions against treating the post-ceasefire FX rebound as if the shock were over. More important is identifying which currencies will continue to be weighed down by energy import bills, deteriorating current accounts and policy-management pressure, and which currencies can benefit from energy exports, low valuations or healthier external balances. In the short term, USD may not weaken as sharply as the long-term de-dollarization narrative suggests; FX trading should focus more on regional and cross-currency divergence.
Risks
- Energy flows through the Strait of Hormuz recovering faster than expected could weaken the relative advantage of USD and energy-export currencies.
- If energy prices fail to stay elevated or European natural-gas prices do not face upside risks, the GBP and EUR-related views could change.
- Hungary's election outcome or the path to EU fund disbursement may differ from market expectations, causing sharp short-term volatility in HUF.
- USD's long-term reserve-currency status is affected by policy uncertainty and strategic-alliance changes, but if these long-term factors are already priced in, they could still weigh on USD.
- Changes in risk appetite, positioning and global volatility could temporarily overwhelm the trade-conditions fundamentals.
What to watch
- Whether energy shipments through the Strait of Hormuz normalize gradually, and whether oil prices and European natural-gas prices return to pre-conflict levels.
- Current accounts, balance-of-payments data and signs of policy intervention in Asian energy-importing economies, especially INR, PHP and THB.
- Relative performance among BRL, MXN, MYR, CNY versus ZAR and CLP, to see whether the market shifts from risk-beta pricing to trade-condition pricing.
- Hungary's election result, the size of the opposition victory, news on EU fund disbursement and EUR/HUF reaction.
- UK local elections, UK fiscal and political risks, expectations for BoE easing, and whether GBP/USD starts to reflect domestic UK risks again.
- Gold price trends, the persistence of the EUR/CHF and gold correlation, and the SNB's tolerance for franc appreciation.