ForexLive warns traders about the low market liquidity that often happens on Monday mornings. Caution is advised, as prices may change until more Asian markets are open. Here are the current exchange rates as the trading week begins: – EUR/USD: 1.1720 – USD/JPY: 146.85 – GBP/USD: 1.3518 – USD/CHF: 0.8015 – USD/CAD: 1.3825 – AUD/USD: 0.6488 – NZD/USD: 0.5858

Forex Market Updates

More updates and weekend news will be shared soon. Since liquidity is low, we must be careful with any early trades this week. The main trend shows US dollar weakness against European currencies, with EUR/USD going above 1.17 and GBP/USD exceeding 1.35. This comes after the Federal Reserve shifted to a rate-cutting stance earlier this year, responding to stabilized US inflation. The last core CPI report for July 2025 showed inflation at 2.5%. Even with the general softness of the dollar, the USD/JPY rate stays strong near 147. This recalls the trends from late 2023. The interest rate difference is key here, as the Bank of Japan has been slow to adjust its policy. This encourages many traders to focus on carry trades, which benefit from this ongoing rate gap. The Euro seems to be gaining strength due to a stronger continental economy than expected. Recent economic sentiment data from Germany shows improvement, and the European Central Bank has indicated it is not in a hurry to cut rates like the Fed. This difference suggests that buying dips in EUR/USD will likely remain a popular approach in the coming weeks.

Commodity Currencies Outlook

In contrast, commodity currencies such as the Australian and New Zealand dollars are having a tough time. This is mainly due to ongoing signs of a slowdown in China, with last month’s disappointing Caixin Manufacturing PMI data. Until Chinese demand shows a significant rebound, call options on the AUD/USD are likely to struggle. With these mixed signals, we can expect increased volatility as central bank policies vary. Given the strong trends, derivative traders might consider strategies that limit risk, like bull call spreads on EUR/USD, to take advantage of Euro strength while minimizing potential losses. The key data to watch for will be the next set of inflation and employment figures from the US and Europe. Create your live VT Markets account and start trading now.

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