The Swiss franc has done well in 2025, rising 14.34% so far against the US dollar. The euro follows closely with a 13.69% increase, thanks to strong growth and lower political risks in Europe. The British pound is holding steady with an 8.77% gain despite some economic uncertainties. The Australian dollar and Japanese yen have also improved, with increases of 7.67% and 6.87%, respectively. The Canadian dollar, however, has lagged, gaining just 4.42%, affected by low oil prices and challenges in domestic growth. In September, currency trends changed, with the Australian dollar climbing 1.96% for the month. This rise was driven by higher demand for commodities and a positive growth outlook in the Asia-Pacific region. The New Zealand dollar also gained, up 1.17%, reflecting a short-term increase in risk appetite. Meanwhile, the Swiss franc maintained a positive trend but with slower growth, and the euro and British pound saw modest increases. The Japanese yen and Canadian dollar dipped slightly, by 0.11% and 0.26%.

Shift in Currency Preference

The strong performance this year shows a preference for safe-haven currencies during global uncertainties. September may signal a shift towards commodity currencies as risk appetite increases. However, this trend depends heavily on global demand and central bank actions. With the noteworthy changes in September, we need to consider whether the long-standing preference for safe havens is fading. The Australian dollar’s recent strength, supported by iron ore prices rising to $135 per tonne due to renewed demand from China, indicates a new willingness to take risks. This change prompts us to reassess our positions in the Swiss franc. For traders in derivatives, this could mean increased volatility, especially in currency pairs linked to commodities. Buying call options on AUD/USD with expirations in the next 30 to 60 days might be a good strategy to benefit from further gains if this bullish sentiment continues. This approach allows us to profit from an upward trend while keeping our risks contained in case it’s just a temporary spike. The Swiss franc’s strong performance in 2025 has been driven by global uncertainty and the Swiss National Bank’s firm approach to inflation. However, with the franc’s growth slowing down recently, we might consider put options on USD/CHF to protect against a possible downturn or peak in its value. The franc remains a solid defensive asset, making it feel too risky and premature to short it outright.

Euro and Dollar Dynamics

The euro’s continued rise this year is now backed by real economic improvements. The flash manufacturing PMI for September came in at 50.8, marking its first growth reading in over a year. We can use bullish option spreads on EUR/USD to take advantage of this more gradual, fundamental strength, which is a more cautious strategy compared to the more volatile Australian dollar. Central to this trend is the ongoing weakness of the U.S. dollar, which has struggled since the Federal Reserve’s 25-basis-point rate cut in July 2025. Historically, pivots from the Fed, like the one in 2019, often result in extended periods of dollar weakness as capital shifts to regions with better growth prospects. We should expect this softness in the dollar to persist as long as global growth forecasts remain positive. Lastly, the underperforming Japanese yen and Canadian dollar tell an important part of the story. The yen struggles with its low yield status while other central banks maintain tight policies. Meanwhile, the Canadian dollar faces pressure from stagnant oil prices. This weakness makes currency pairs like AUD/CAD particularly appealing, and we could structure trades that go long on the Australian dollar while shorting the Canadian dollar to take advantage of differing commodity trends. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now