On Monday morning, the market has low liquidity, but it usually improves as Asian markets open. Early trading can lead to price swings due to these thin conditions. The indicative foreign exchange rates have stayed stable compared to Friday’s levels. Key currency pairs are: – EUR/USD at 1.1746 – USD/JPY at 147.93 – GBP/USD at 1.3479

Current Exchange Rates

Other rates include: – USD/CHF at 0.7955 – USD/CAD at 1.3780 – AUD/USD at 0.6597 – NZD/USD at 0.5867 These rates reflect market conditions on September 22, 2025. Traders should be cautious due to potential volatility. With low liquidity this Monday, sharp moves could occur. Current exchange rates suggest the US dollar may continue to weaken, a trend seen throughout 2025. This decline seems linked to the Federal Reserve’s rate cuts earlier this year, responding to US inflation dropping to a steady 2.5% after the turmoil of 2022-2023. The dollar’s weakness is most noticeable against the euro and pound, but the situation with the Japanese yen is different. USD/JPY remains high near 148 because the interest rate gap is still large, despite the lower Fed funds rate. The US 10-year Treasury yield is around 3.5%, while Japanese government bonds yield only 1.1%, making the carry trade appealing for now.

Strategic Overview

This indicates that traders in derivatives should consider strategies that take advantage of a slow but selective decline of the dollar. Buying call options on EUR/USD could be a good move, betting on expected hawkish policies from the ECB against a dovish Fed. Meanwhile, selling out-of-the-money puts on USD/JPY may be a smart way to collect premiums, assuming the Bank of Japan won’t surprise the markets with aggressive changes. However, the ongoing weakness in the Australian and New Zealand dollars raises concerns about global growth. China’s recent manufacturing PMI data showed a reading of 49.8, indicating slight contraction and reviving fears about its property sector, first seen in 2023. This means while we can be bearish on the dollar, it may be wise to use options to protect against a wider economic slowdown. The strong Swiss franc, with USD/CHF at 0.7955, reflects a cautious market mood. Thus, traders should be careful not to take on too much risk, given the clear demand for safe havens. Opting for option spreads instead of outright positions could help manage costs and define risks as we head into an uncertain autumn. Create your live VT Markets account and start trading now.

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