Euro Could Go Lower From Here, Yu Says

Watch on YouTube ↗  |  August 21, 2026 at 14:01  |  4:57  |  Bloomberg Markets
Speakers
Geoffrey Yu — Senior Strategist, BNY Mellon

Summary

Geoffrey Yu discusses US financial conditions, Treasury refunding risk, and volatility redistribution. He argues robust US real rates attract investors, European equity momentum can continue, and APAC currencies are favored FX trades. He also has high conviction that the euro can fall further against the dollar and crosses.

  • The November 4 refunding is seen as a key test for whether Treasury actions loosen financial conditions.
  • The Fed may need to offset Treasury-driven loosening if inflation remains above target.
  • Robust US real rates are attracting domestic and international investors.
  • Suppressed fixed income volatility can be redistributed into FX, equity, gold, and Bitcoin.
  • APAC currencies such as the Korean won, Taiwan dollar, and yen are favored on current account surpluses.
  • European equity momentum can continue because Europe is improving.
  • The euro is expected to fall from current levels against the dollar and crosses.
Ideas
Geoffrey Yu Senior Strategist, BNY Mellon 2:24
Robust real rates attract investors to Treasuries.
US yields are high but breakevens have not moved as much, so real rates remain robust. Domestic investors such as pension funds and LDI managers, as well as international investors, would want to own these robust real rates, and BNY is seeing that in its own data.
TLT MED
Geoffrey Yu Senior Strategist, BNY Mellon 3:57
Gold, Bitcoin part of volatility redistribution.
Volatility cannot be artificially suppressed on a comprehensive basis; suppressing fixed income volatility tends to redistribute it into FX or equity volatility. Markets are therefore looking for other areas to hedge risk, and the moves in gold and Bitcoin are part of that dynamic.
GLD BTC LOW
Geoffrey Yu Senior Strategist, BNY Mellon 4:29
APAC currencies favored for current account surpluses.
Geoffrey still likes APAC currencies as selective FX trades, favoring those with heavier current account surpluses. Korea is already performing, and he is looking at the Taiwan dollar and yen as other trades.
APAC currencies USD/KRW TWD FXY HIGH
Geoffrey Yu Senior Strategist, BNY Mellon 4:38
European equity momentum can continue.
Europe is actually improving, so the current momentum in European equity markets can continue from here.
VGK MED
Geoffrey Yu Senior Strategist, BNY Mellon 4:47
Euro can fall versus dollar, crosses.
European equity strength does not imply a stronger euro. His high-conviction trade is that the euro comes off from current levels, not only against the dollar but also on the crosses.
FXE HIGH
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This Bloomberg Markets video, published August 21, 2026, features Geoffrey Yu discussing TLT, GLD, BTC, APAC currencies, USD/KRW, TWD, FXY, VGK, FXE. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Geoffrey Yu  · Tickers: TLT, GLD, BTC, APAC currencies, USD/KRW, TWD, FXY, VGK, FXE