Daily Forex Highlights — May 13

VG Markets · 2026-05-13T07:54:54Z
Daily Forex Highlights — May 13


🎯 Top Story

US April CPI beats forecasts across the board


What happened: US April CPI came in at 3.8 percent year-on-year, above the 3.7 percent forecast and the highest since May 2023. Core CPI hit 2.8 percent, above the 2.7 percent forecast and the highest since September 2025. Fed's Goolsbee called the report "disappointing."


Why it matters: Inflation is not cooling as expected. Near-term rate cuts are off the table. The dollar gets a clear boost.


Market impact: Bullish for the dollar.🔥 Quick Takes


Dollar

  1. ADP weekly employment: Private sector added 33,000 jobs per week on average in the four weeks ending April 25 → Moderate job growth. Labor market is gradually cooling.
  2. Fed's Goolsbee: If rising services prices reflect an overheating economy, the Fed must think seriously about breaking the inflation chain → A clear hawkish stance. Further tightening is on the table.
  3. Senate confirms Warsh as Fed governor; chair vote on Wednesday → Warsh is moving through as expected. Medium-term support for the dollar.
  4. Fed's Goolsbee: April CPI report was disappointing → Official disappointment. Rate cut hopes fade further.
  5. US April CPI at 3.8 percent versus 3.7 percent expected; core at 2.8 percent versus 2.7 percent expected → Inflation beats across the board. No Fed cuts anytime soon. Bullish for the dollar.

Euro

  1. German May investor confidence rises unexpectedly but remains in negative territory → A slight improvement, but the outlook remains gloomy.
  2. ECB's Nagel: If oil shock causes inflation expectations to de-anchor, the ECB must act → A hawkish stance. Rate hikes are still an option.
  3. ECB's Patsalides: There is a scenario where the ECB does not hike → A dovish counterpoint. The ECB is split.
  4. French unemployment rate tops 8 percent for the first time in five years → Labor market is deteriorating. Pressure on the euro zone's second-largest economy.
  5. French April inflation confirmed at 2.5 percent, highest since July 2024 → Inflation is rebounding. France faces stagflation risks.

Pound

  1. UK political turmoil surges; gilt yields spike to 28-year highs → Political crisis and rate expectations are both driving yields higher. Panic is rising.
  2. Market pricing fully prices in three 25 basis point rate hikes from the BOE in 2026 → Extremely hawkish expectations. Short-term support for sterling.
  3. Junior minister Vara resigns, urges prime minister to set a departure timeline → Cabinet members are turning. More pressure on Starmer.
  4. Two more officials resign → Resignations keep coming. Government stability is eroding.
  5. Chancellor Reeves's allies believe she should stay on as chancellor if Starmer is ousted → Power struggles are surfacing. Political uncertainty is rising.
  6. Starmer tells cabinet he intends to stay → The prime minister is refusing to step down. Confrontation with party rebels is escalating.
  7. Prime minister asks cabinet not to discuss his future and meets members one by one → Damage control is underway. The crisis is already deep.


Yen

  1. BOJ Governor Ueda to speak at BOJ monetary policy meeting on May 27 → Markets will watch for any rate hike signals.
  2. No meeting between Bessent and BOJ Governor Ueda → US-Japan policy communication did not happen as expected. Intervention speculation cools.
  3. Japan's 20-year government bond yield rises to 3.511 percent, highest since 1996 → Long-end yields are spiking. Markets are pricing in more BOJ hikes.
  4. OECD: BOJ policy rate could reach 2 percent by the end of 2027 → An international forecast for a long tightening path. Medium-term support for the yen.


Other

  1. Ueda appointed chair of the Committee on the Global Financial System for a two-year term → His global influence is rising. The BOJ's policy communication will carry more weight.
  2. BIS board elects Italy central bank governor Panetta as new chair → European central bank influence is growing at international institutions.
  3. S&P cuts Mexico outlook to negative on fiscal flexibility concerns → The peso is under pressure.
  4. Bank of Thailand: Second-round inflation risks remain limited; supply-driven inflation expected to slow next year → A dovish tilt. The baht lacks a near-term catalyst.
  5. Bank Indonesia senior deputy governor: Continuing "calibrated intervention" to stabilize the rupiah → Intervention is ongoing. Short-term support for the rupiah.


Key Data Snapshot


💡 Final Take

  • Three themes dominate FX markets today: US inflation beats, UK political crisis, and yen support from rising yields.Dollar: CPI came in hot at 3.8 percent, core at 2.8 percent. Both beat forecasts. Goolsbee called it "disappointing." Warsh is moving through confirmation. Near-term rate cuts are gone. The dollar stays strong.
  • Pound: The political crisis is getting worse. Resignations keep coming. Starmer refuses to step down but is doing damage control. Gilt yields hit 28-year highs. Markets have fully priced three BOE hikes for 2026. Sterling gets support from rate expectations, but political risk is the wild card.
  • Yen: The 20-year yield hit 3.511 percent, the highest since 1996. OECD sees BOJ rates at 2 percent by end 2027. Ueda speaks on May 27. Medium-term support for the yen is building.
  • Euro: The ECB is split. Nagel is hawkish. Patsalides is dovish. French inflation is up. Unemployment is up. The euro zone outlook is gloomy.


Final takeaway: US inflation keeps the dollar strong. UK politics are a mess, but rate expectations are extreme. Yen yields are spiking. The ECB is divided.


Looking Ahead


  • Warsh chair confirmation vote on Wednesday
  • Will more UK officials resign?
  • Ueda's May 27 speech for rate hike signals
  • French jobs and inflation data ahead
  • Rupiah intervention effectiveness