USD Extends Winning Streak

 

14 MAY 2026

MARKET REPORT

USD Extends Winning Streak 

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• Back-to-back hot inflation prints drive Treasury yields to highest since mid-2025
   
• Health Secretary Streeting reportedly preparing to resign and trigger Labour leadership contest

Recap

Back-to-back hot inflation prints drove dollar demand for the third consecutive day. US PPI followed Tuesday's hot CPI to send Treasury yields to their highest levels since mid-2025 – 10-year yields rose toward their highest since July and 30-year yields traded above 5% for the first time since 2007. Markets are now almost fully pricing in a Fed rate hike over the next 12 months, with the Iran war driving up energy and freight costs that are rippling through the broader economy.

GBP moves were muted despite the deepening UK political crisis. The Times reported that Health Secretary Wes Streeting has told allies he is preparing to resign and trigger a leadership contest as soon as today – with talks already held to prepare MPs to sign his nomination papers. GBPAUD dropped 0.47% as commodity currencies outperformed – AUD and NOK both benefitting from rising oil prices.

Today

Market rates

*Daily move - against G10 rates as of 5pm BST on 13.05.26

** Indicative rates - interbank rates as of 5pm BST on 13.05.26

Data points

Our thoughts

USD traded in narrow ranges overnight as Trump and Chinese President Xi Jinping met in Beijing to discuss trade, tariffs, Taiwan, and Iran, with both leaders striking an optimistic tone that kept markets calm.

US retail sales at 13:30 is the standout release. Consensus expects a slowdown to 0.5% MoM from a very strong 1.7% previously. After this week's CPI and PPI beats, any sign of consumer resilience would further fuel Fed rate hike expectations and push USD higher. A weak number could provide a brief window of USD softness –but is unlikely to change the broader direction given the inflation backdrop. Weekly jobless claims round out the US data slate – expected to tick up marginally to 206k from 200k. Given the Fed's focus on the job market, any significant deviation from expectations could move markets.

For GBP, the UK political situation remains the dominant driver. Reports that Health Secretary Streeting is preparing to resign and trigger a leadership contest could come to a head. Angela Rayner, is also reported to be preparing to run in leadership contest.  GBP direction is entirely at the mercy of political headlines.

Middle East developments remain the background wildcard – US-Iran ceasefire uncertainty keeps oil elevated and safe-haven USD demand alive heading into the weekend.

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