Russia’s Producer Price Index (MoM) stayed at -1.3% in June. This means there were no changes in prices compared to last month, indicating stable costs for producers. The AUD/USD pair is slipping downward but remains above 0.6500. Markets are waiting for the Australian employment report to provide new direction. Speculation about the Federal Reserve’s interest rate is boosting demand for the US Dollar, affecting this currency pair.

USD/JPY and Bank of Japan

USD/JPY rose back to 148.00, as expectations for a Bank of Japan rate hike have lessened. Weak Japanese trade data and a stronger US Dollar are driving this currency movement. Gold prices are slightly down due to lower demand and mild gains in the US Dollar. Ongoing uncertainties about trade may still impact the XAU/USD pairing. Ethereum surged above $3,400, with a 10% increase in one day and a 25% rise over the week. It ranks second among major cryptocurrencies, just behind DOGE. China’s GDP growth reached 5.2% year-on-year in Q2, supported by strong trade and industrial output. However, concerns linger about slowdowns in fixed-asset investments and retail sales, along with falling property prices. We believe that Russia’s stable producer pricing could be misleading. The overall consumer inflation rate in Russia recently hit 7.8% year-over-year. This high rate may compel the central bank to stick to a strict monetary policy. We are cautious about betting against the ruble based on this single producer figure.

Australian Dollar and US Futures Markets

We view the current weakness of the Australian dollar as a potential trend. Australia’s latest employment report showed an uptick in the unemployment rate to 4.1%. With futures markets lowering expectations for early Federal Reserve rate cuts, we see value in buying AUD/USD put options for a favorable risk profile. This strategy prepares us for a potential drop below the key support level of 0.6500. The yen’s decline seems set to continue, as Japan’s core inflation recently dipped to 2.3%. This gives the central bank reason to delay major policy changes. Historically, the significant yield gap between US and Japanese government bonds has led to a stronger dollar against the yen. We are considering USD/JPY call options to benefit from a rise above the 148.00 level. We think gold’s price is under pressure from rising US real yields, which raises the cost of holding non-yielding assets. The US Dollar Index (DXY) moving back above 104 supports this view. Therefore, we are looking into selling out-of-the-money call spreads on gold to profit from sideways or slightly declining prices. The 25% weekly surge in digital assets is closely linked to institutional speculation about spot ETF approvals, which we find compelling. Open interest in call options has spiked, especially for striking prices above $3,500. This confirms a strong bullish sentiment in the derivatives market. We believe that long call options are a smart way to gain exposure to potential upside while managing risk. We are cautious about China’s headline growth figure due to clear signs of weakness in its economy. Reports of a 9.6% year-over-year drop in property investment and a manufacturing PMI below 50 reinforce worries about domestic demand. This strengthens our bearish outlook on industrial commodities, suggesting that put options on copper futures could be a timely move. Create your live VT Markets account and start trading now.

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