As the week begins, initial FX pricing indicates slight strength in the euro and weakness in the dollar.
by VT Markets
/
Aug 17, 2025
As the new week begins, early FX rates show small changes. The euro (EUR) seems a bit stronger, but the move is very slight.
The initial pricing suggests the US dollar (USD) is weaker overall. However, these early numbers might change as the session moves on.
Soft Start To The Week
We’re starting the week slowly, with the US dollar dipping slightly against most currencies. The euro is gaining a bit of strength, but it’s barely noticeable. This suggests that traders are cautious and not ready to make big moves just yet.
This caution makes sense after last week’s data. The latest US Consumer Price Index (CPI) for July 2025 showed a rate of 3.1%, slightly below expectations. This supports the idea that the Federal Reserve is likely to keep rates steady. Also, comments from European Central Bank officials hint at one more rate hike possibility in September.
Everyone is now focused on the Jackson Hole symposium at the end of the month. This important event is expected to give clearer direction on future policies for the year. We believe that market volatility will stay low until we get more information from central bank leaders.
Opportunities For Derivative Traders
For derivative traders, this calm period creates opportunities. Implied volatility in major currency pairs like EUR/USD has decreased, with one-month volatility dropping to 5.8%. This is the lowest level we’ve seen since before the hiking cycles started in 2022. Buying options, such as straddles or strangles, could be a smart move to prepare for the price shifts we expect around the symposium.
We’re also noticing a growing difference in policy between the Fed and the ECB. With Fed funds futures showing a less than 10% chance of another hike in 2025, the easiest path for the dollar seems to be sideways or down. Traders might want to consider longer-term options that benefit from potential sustained strength in EUR/USD as we approach the fourth quarter.
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by VT Markets
Aug 17, 2025
Insights 
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