FX and Rates Converging Again | March 28, 2026 | The Daily Spark | Apollo

Apollo: Since the trade war began, the dollar has traded weaker than interest-rate differentials would have predicted, see chart. We expect to see convergence between FX and yield differentials as higher-for-longer rates in the US continue to attract investment from abroad and put upward pressure on the dollar.

Note: Chart - 1-year yield differential = 1-year German government bill minus 1-year US T-bill. pp = percentage points. Sources: Bloomberg, Macrobond, Apollo Chief Economist