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The US dollar strengthens to around 97.93 amid geopolitical tensions between Israel and Iran.
The US Dollar is holding steady at 97.93 despite increasing tensions between Israel and Iran. These geopolitical issues could keep risk appetite low, impacting high-beta currencies like the AUD and NZD if the situation escalates.
If tensions ease, the dollar could weaken, allowing riskier assets to gain support. This week’s key event is the FOMC meeting, where markets expect two interest rate cuts by the end of the year. If the Fed signals a different stance, it could strengthen the dollar.
The Swiss Franc stays stable against the US Dollar as traders get ready for central bank decisions.
The USD/CHF exchange rate is close to 0.8115 as traders look forward to interest rate announcements from the Federal Reserve (Fed) and the Swiss National Bank (SNB) this week. In May, Swiss producer and import prices continued to decline, hinting at a possible rate cut by the SNB. The KOF has reduced its 2026 GDP growth prediction for Switzerland to 1.5% due to unpredictable US trade policies.
The Swiss Franc remains steady against the US Dollar, even as the US Dollar Index slips and tensions rise between Israel and Iran. Currently, the USD/CHF is around 0.8106 during the European session, staying within a tight range.
Inflation Trends and SNB Policy Expectations
In Switzerland, inflation is low, with producer and import prices dropping 0.7% from last year in May. This has raised expectations that the SNB may ease its policy further, potentially lowering rates by 25 basis points. The KOF Swiss Economic Institute forecasts a gradual increase in unemployment to 3% by 2024, alongside lower inflation expectations. The Federal Reserve is likely to keep interest rates steady on Wednesday, while central bank decisions and geopolitical events will influence the direction of the USD/CHF pair. As monetary policy meetings approach, market attention turns to how central banks communicate their decisions. Producer and import prices in Switzerland have continued to fall, reinforcing the likelihood of an SNB rate cut. It’s not just about headline inflation; the weakening demand signals from the economy suggest that domestic businesses are adjusting to softer external demand, rather than just passing costs to consumers, supporting the need for monetary easing.Market Reactions and Strategic Positioning
The low inflation environment supports what Jordan indicated earlier. Traders, especially in interest rate derivatives, are likely anticipating a 25 basis point cut at the SNB’s next meeting. The central bank’s comments will be crucial for market adjustments afterward. Many expectations are already built in, but more conviction could emerge based on how dovish the language is or if there are hints of further actions later in the year. On the other hand, Powell’s Fed is not expected to shake things up. Keeping rates steady seems likely due to mixed economic data and a few early-year inflation surprises. However, projections can still influence market positioning. If economic forecasts remain strong and long-term rate expectations rise, traders might adjust their USD positions after a recent soft trend. This situation leads to pricing in future volatility, especially around the meetings of both banks. Markets will likely react quickly post-announcement, particularly if either central bank surprises. KOF’s lowered growth forecast shouldn’t be overlooked; a revised growth expectation of 1.5% for 2026 and a predicted rise in unemployment to 3% next year suggest the economy may be losing momentum. External factors, including tensions from Washington, also impact confidence. Currently, the Swiss Franc is steady near 0.8100 against the US Dollar. Although not dramatic, this tight range may lead to more significant moves once rates are confirmed. The Dollar Index has dipped slightly, suggesting market hedging ahead of the dual central bank announcements. The confined price action and potential for both central banks to lean more dovish could benefit those positioned for gradual, yet decisive breakouts. In the short term, it will be important to monitor risk factors tied to geopolitical events. A connection between policy decisions and safety-seeking capital flows might develop, especially if Middle Eastern tensions rise. Hedging strategies and options pricing reflect this trend. Rate differentials remain the key influence. The already low yields in Switzerland could decrease further, and with the Fed expected to keep rates steady for now, any widening spreads could encourage movements into carry pairs away from the Swiss Franc. It’s essential to remain agile where the curve structure is at risk—what happens in the next two weeks will set new benchmarks. Create your live VT Markets account and start trading now.US urges Vietnam to reduce dependence on Chinese technology amid tariff negotiations and restructuring efforts
The United States is pushing Vietnam to reduce its reliance on Chinese technology. This effort is part of ongoing tariff talks between the two countries aimed at reforming supply chains. By doing so, the US hopes to lessen its dependence on Chinese components.
The main goal is to accelerate the US shift away from Chinese technology while enhancing Vietnam’s manufacturing capabilities. Although Vietnam is a crucial manufacturing hub for major companies like Apple, Meta, and Google, it often depends on components made in China.
Reducing Dependence On Chinese Products
The US is focused on cutting its reliance on Chinese high-tech products. It is also urging Vietnam to act more decisively against “origin washing,” where products are disguised as made in Vietnam to avoid tariffs. Vietnam has faced a temporary 46% tariff since April, with talks continuing until July 8. To clarify, the US is encouraging Vietnam to limit the use of Chinese hardware and technology in exports to the US. This effort aims to prevent Chinese goods from entering the US while appearing as products from Vietnam—this practice is referred to as “origin washing.” By tightening regulations, Washington hopes to close loopholes that undermine tariffs on Chinese-made goods. The discussions are significant as the temporary 46% tariffs may lead to a policy update on July 8. This situation puts Vietnam in a challenging position. It plays an increasingly vital role in producing electronics for major global tech companies. While its factories produce phones, headsets, and components for firms like Apple and Google, many of these products still rely on parts made in China. Increased scrutiny of supply chains creates potential risks, making it harder to ensure these parts don’t come from China under false pretenses.Impact On Trade And Manufacturing
As investors, we should be concerned not just about where products are assembled, but also where their core components are manufactured. If Vietnam seeks favorable trade terms in the future, it may need to increase its own capacity for manufacturing crucial parts like chips and displays, or collaborate with countries not affected by US policies. We’re paying close attention to see if temporary tariffs become permanent. The current atmosphere in Washington suggests there won’t be much leniency. From a derivatives perspective, it’s important to monitor contracts linked to large technology firms sourcing materials from Southeast Asia. If negotiations fail and tariffs become stricter after July 8, this could create pricing pressures for OEMs, especially for those relying heavily on cost-effective assembly in northern Vietnam. Certain sector ETFs, particularly those focused on emerging market manufacturers, could face challenges if sourcing methods become more complex or legal restrictions intensify. We should also keep an eye on indicators showing volatility in logistics and component exports. There’s a noticeable difference between firms that control a significant portion of their supply chain and those that depend on third-party contractors across borders. Recently, some parts distributors have taken steps to hedge against potential delays in the Red River Delta region. This strategy makes sense, as any setbacks could lead to increased insurance costs, higher profit margin fluctuations, or reduced availability during delivery windows in the third quarter. The upcoming weeks will focus on interpreting tariff updates and assessing short-term hedging strategies related to manufacturing ETFs. Speculation surrounding further decoupling is likely to surface here first. Our concerns revolve more around issues in sourcing standards than declines in demand. The ongoing discussions send a clear message: being geographically close isn’t enough. The source of every chip and sensor is now scrutinized. Traders should be prepared to react to news from Hanoi or Washington, as it may signal sudden shifts in pricing. Create your live VT Markets account and start trading now.The Australian dollar is expected to fluctuate between 0.6430 and 0.6550.
The Australian Dollar (AUD) is expected to trade between 0.6460 and 0.6520 in the short term. Recent data suggests that downward pressure on the AUD is easing. Over the longer term, it seems to be moving within a range of 0.6430 to 0.6550.
Last Friday, the AUD dropped sharply in early Asian trading, hitting 0.6457, but quickly bounced back. This recovery shows reduced downward pressure, indicating sideways trading in the near future.
Current Trading Phase
In the previous update, we mentioned that the AUD is starting a new trading phase. This suggests that it will likely fluctuate between 0.6430 and 0.6550 for the time being. It’s important to note that this information carries risks and uncertainties and should not be interpreted as investment advice. Always conduct thorough research before making investment decisions since markets can lead to financial loss. The author holds no shares or business ties related to this content. So far this week, the AUD’s movements support the idea of stabilization rather than a clear breakout in either direction. The dip on Friday, which quickly reversed, indicates that selling pressure may be weakening, at least for now. The rapid recovery from below 0.6460, with little trading volume, suggests a lack of strong conviction to push the currency lower.Market Trends
It’s not just the level of recovery that’s important but also how quickly it happened. Such moves—sharp declines followed by quick rebounds—often mean that market participants are either running out of liquidity or have become too one-sided in their positions. We’ve observed similar scenarios with the AUD, where short-term drops clear out weaker traders, only for prices to stabilize again. Traders should watch for exhaustion signs around the 0.6430 to 0.6550 range, as these points act like hinges. From a derivatives standpoint, the recent drop in short-term implied volatility shows that the market isn’t expecting big price changes soon. This decline often indicates that traders are more cautious or hedged, possibly using strategies like straddles or strangles near the middle of this range, as they perceive limited directional risk. Recent options trading shows increased put-option writing close to the lower boundary at 0.6450. This suggests traders expect declines to be short-lived. Meanwhile, some call buying near 0.6550 indicates a cap on potential gains for now. There’s little interest in trading outside these levels unless major macroeconomic changes occur. When considering carry trade impacts, the Reserve Bank of Australia’s decision to hold rates has made the AUD less appealing compared to global yields. However, since expectations around interest rate differences are well-established among G10 countries, this alone is unlikely to cause sharp price swings unless local data or sentiment shifts unexpectedly. It’s still important to monitor reactions to trade balance data or sentiments tied to China, but, barring significant events, range-bound strategies will likely perform better than directional trades. With prices stagnant and no fresh news, volatility sellers may seek to earn profit through tight expiry windows, potentially using short iron condors if the range holds. We will closely monitor the market positioning. If open interest in futures starts to grow—especially with large trades in front contracts—it may signal an upcoming movement outside the current range. Until then, the market reflects a lack of strong conviction, with more back-and-forth trading than decisive action. During these phases, the goal isn’t to catch highs or lows. Instead, focus on managing trades at the extremes while keeping risk defined. Maintain minimal delta exposure and use gamma strategically to benefit from small, short-term price changes. This approach minimizes risk while allowing opportunities to profit from intraday or two-day movements—exactly what the market currently offers. Create your live VT Markets account and start trading now.De Guindos says EUR/USD at 1.15 won’t hinder inflation targets, noting balanced risks
Luis de Guindos, the vice president of the European Central Bank, said that the rise in the euro’s value isn’t a big problem for achieving inflation targets. He noted that the euro has not increased sharply, and market volatility is low.
The chances of not hitting the inflation target are very low, with risks to inflation appearing balanced. Additionally, the markets have understood the European Central Bank’s (ECB) message after their latest decisions.
The ECB is close to its inflation goal, but de Guindos believes that tariffs will likely slow both economic growth and inflation in the coming months. The Federal Reserve’s swap lines are expected to remain active, and discussions about moving gold reserves back from New York have not taken place.
It’s unusual for central bankers to speak directly about exchange rates, making de Guindos’s comments noteworthy. His other statements were more typical and less remarkable.
De Guindos’s remarks provide a clear view of the current monetary policy situation in the euro area. He indicated that the euro’s rise isn’t a barrier to meeting inflation targets, suggesting that policymakers do not find current exchange rates disruptive. In straightforward terms, the recent strength of the euro does not concern the ECB. The euro has gradually increased in value, not suddenly, which means markets are stable and not confused. More importantly, overall market volatility is low—there haven’t been wild price movements that signal instability.
When inflation risks are described as “balanced,” it means we’re not facing a sharp drop in prices that would make debt harder to manage, nor are we at risk of rising inflation that would hurt buying power. This gives markets—especially interest rates and currency derivatives—a clearer path. Expectations can now be priced more accurately, reducing surprises.
Traders should pay attention to this information. If inflation is expected to remain stable, further actions from the central bank are unlikely. Since option prices typically rise with uncertainty, this steady guidance could lead to lower implied volatility in interest rate markets. Carry trades remain appealing during stable times, with predictable yield differences and gradual price movements.
De Guindos also mentioned tariffs as a medium-term issue that may reduce both economic output and price growth. This is specific and actionable. If this happens, we could expect trade-sensitive sectors to underperform, and long-term inflation expectations in swaps or inflation-linked bonds might decrease. Rather than focusing solely on current numbers, it makes sense to consider how future price pressures may lessen due to trade-related challenges.
He briefly mentioned the Federal Reserve’s liquidity measures, known as swap lines, which help ensure smooth dollar funding in Europe. By expressing confidence in their continuation, De Guindos indicated that liquidity stress is not a significant concern at this time. There are no major credit issues or chaotic funding pressures in offshore dollar markets. This reduces the risk of market disruptions, particularly for leveraged positions in cross-currency trades.
Lastly, his comments about gold reserves were telling. The absence of discussion about moving gold back across the Atlantic suggests a steady approach to central bank reserve management. This can indicate confidence in credit reliability and geopolitical stability. Therefore, this calm underscores financial stability, and there’s no need for heightened risk management through commodities.
Overall, this was not a press statement filled with hidden meanings or cryptic warnings. Apart from the unexpected comment about the exchange rate, the rest of his message conveyed normalcy—steady progress toward goals without visible issues. For short-term strategies involving fixed-income derivatives, we recommend focusing on stability—well-structured but not overly directional—and avoiding sudden volatility spikes unless significant changes occur in the bond market price movements.
Indian Rupee rises slightly during European trading after dipping near 86.20 against the USD
The Indian Rupee (INR) bounced back after hitting a two-month low of 86.20 against the US Dollar (USD), rising to around 86.00. Meanwhile, the US Dollar Index (DXY) fell to near 98.00 from a daily high of 98.36.
The conflict between Israel and Iran is leading more investors to seek safe assets like the US Dollar. With no resolution in sight, demand for these safe-haven assets is growing.
Impact On Oil Prices
Iran may close the Strait of Hormuz, a key oil route, which could raise oil prices. This would be a problem for India, as the country relies heavily on oil imports. The US Dollar’s performance varied against other currencies, especially declining against the Australian Dollar. The Federal Reserve is expected to keep interest rates steady on Wednesday, and the market is focused on future rate predictions in light of changing economic policies and rising oil prices. India’s inflation data and outflows of foreign investments are contributing to the rupee’s weakness, even as CPI growth slows to its lowest in six years. In the stock market, Foreign Institutional Investors are selling off Indian shares, impacting market trends. The USD/INR rate fell back after reaching a two-month high, with the 20-day EMA serving as a key support level. With the rupee recovering from its recent low near 86.20 and now hovering just above 86.00, it appears we are in a pause rather than a full turnaround. The currency’s dip was somewhat expected due to various domestic and international factors. However, the rapid rebound indicates some technical resistance at that point, likely spurred by short-term profit-taking or a slight decline in global Dollar strength. The drop in the US Dollar Index (DXY) to around 98.00 suggests a temporary decrease in demand for the greenback. However, with no diplomatic progress between Israel and Iran, the overall risk environment remains tense. Demand for safe-haven assets usually increases during such times, especially when vital energy routes like the Strait of Hormuz are at risk.Currency Market Volatility
Any significant disruption to oil supplies through that strait could drive oil prices higher, worsening India’s trade balance as an oil-importing nation. This relationship remains stable, and little has changed in that regard. If Brent or WTI oil prices reach new highs due to supply issues, it will add pressure on the rupee, especially with foreign investors pulling out. While the Federal Reserve is expected to maintain its current policy, it still heavily influences capital flows. The Fed’s future interest rate decisions will impact yield spreads and, in turn, Dollar demand. With renewed oil volatility, the bond market is likely to react more strongly. The upcoming statement from policymakers will be important not just for rates but for future guidance, which can also affect volatility. Spread trades are already reflecting this. In India, mixed economic indicators are pushing the rupee into a defensive position. Although consumer inflation has dropped to a six-year low, this has not strengthened the rupee. The ongoing foreign capital outflows are undermining both equity and currency performance. On the charts, the pullback of USD/INR from its two-month high is notable, with the 20-day EMA currently serving as psychological and technical support. If it falls below this level, short-term traders may reconsider bullish positions. However, without a significant rebound in inflows or stabilization in energy prices, pressure on the rupee will likely persist. Volatility has also returned to G-10 currency markets, making hedging strategies especially relevant. The Dollar’s drop against the Australian Dollar indicates a selective unwinding of defensive positions, possibly due to better data or shifts in commodity prices. The risk-on versus risk-off sentiment is varied, and this needs to be reflected in derivatives. In the near term, we are monitoring options pricing as implied volatility rises. Hedgers may need to adjust their strategies and revisit assumptions about oil prices or Dollar demand. Any new geopolitical developments or hawkish comments from the Federal Reserve could quickly increase demand for safe-haven assets. This means that spreads, especially for calendar and cross-currency trades, may see increased activity. For now, keep an eye on oil futures and Treasury yields; they appear to provide clearer direction than equities, which are still experiencing foreign selling. Create your live VT Markets account and start trading now.Israel suggests changes to hostage deal with Hamas, attracting investor interest in possible ceasefire developments
Israel has presented a new proposal for hostage negotiations with Hamas, suggesting a potential short-term ceasefire. Prime Minister Benjamin Netanyahu mentioned “some progress” in this plan, which was originally mediated by U.S. businessman Steve Witkoff. The goal is to free Israeli hostages in Gaza.
The new proposal aims to release 8 hostages on the first day of the ceasefire, with 2 more released between days 20 and 30. This is different from the original plan, which called for 10 hostages to be freed on the first day, with the rest released after 60 days. Hamas had rejected the previous delay due to fears that Israel might start military operations again during the ceasefire. Israel has adjusted its proposal to address these concerns, but it’s unclear if this will lead to resumed formal talks.
Market Relevance
In the markets, the Tel Aviv Stock Exchange and other regional assets have remained stable despite the ongoing tensions. A credible ceasefire proposal could impact investor attitudes, possibly increasing interest in emerging market stocks and the Israeli shekel. Defense stocks may see some fluctuation, and oil prices might change based on Iran’s involvement or signs of peace. Geopolitical risks are high, but signs of diplomatic flexibility could relieve market worries. Traders should keep an eye on updates from Qatar, Egypt, and U.S. officials, as confirmed progress or implementation of a ceasefire would likely influence assets sensitive to risk and the valuation of defense stocks. The discussions here are central to geopolitics and directly affect asset pricing, especially in regions sensitive to instability. A revised offer has been proposed to reach a ceasefire. While the details have changed from earlier versions—particularly regarding when and how hostages will be released—market participants should focus on signals not just from Israel and Hamas, but also from Qatari mediators and Cairo.Tactical Recalibration
Witkoff’s mediation faced challenges due to perceived imbalances in the timelines, where one side felt vulnerable to military action before negotiations advanced. This adjustment represents a tactical shift aimed at providing reassurance, though its reception is still uncertain. Markets are likely to react quickly even before official outcomes are announced, especially with new details suggesting a move toward reduced hostilities. The stability of the local exchange might suggest investor confidence, but it actually reflects a strategy of waiting. These valuations are shaped more by external factors related to security and diplomacy rather than earnings or economic data. Emerging market risk metrics, particularly those tied to frontier markets, often react to probabilities rather than outcomes, so changes in proposals or unexpected statements from negotiators have immediate effects on risk positioning. Defense stocks generally rise as tensions increase but tend to lag when diplomatic progress is made—a pattern that has been consistent in the past. If genuine signs of ease in tensions arise—not just headlines but confirmed actions from Doha or Washington—traders should anticipate immediate adjustments in pricing. Oil prices require careful observation. Movements are rarely tied to just one news source; discussions about an Israeli ceasefire can also affect Iranian dynamics, especially if groups like the Houthis change their behavior. This makes crude prices sensitive, especially during low liquidity periods. If Brent prices rise along with gains in emerging market currencies, it could indicate a broader belief that short-term risks are lessening. In situations like this, we often shift focus from earnings reports to local market chatter and adjust asset exposure based on both direct conflict zones and surrounding areas. The resilience of the shekel during this time indicates expectations rather than outright stability. Traders who rely on volatility premiums should rethink their protective strategies as they prepare for upcoming news cycles. None of this negotiation framework exists in isolation; any sign of reassessment or flexibility impacts the outlook for potential escalation. If Cairo indicates any actionable agreements, market predictions will often shift faster than diplomats can respond. Therefore, we remain agile and closely monitor reliable information. Trades based on unconfirmed assumptions frequently lead to sharp declines; quick reactions paired with strong information tracking generally yield the best results. Create your live VT Markets account and start trading now.An Indian Trade Ministry official mentioned that an interim agreement with the US is in progress.
An official from the Indian Trade Ministry stated that India and the US plan to sign a temporary trade deal before July 9. Negotiations are moving forward, with hopes to finalize the agreement by autumn 2025.
India is discussing rare earth magnets with China, expecting a positive outcome. Recently, the US Dollar Index dropped by 0.20% to 98.00, while the USD/INR exchange rate fell to about 86.15.
Understanding Tariffs
Tariffs are customs duties on certain imports, giving local companies a competitive edge. They differ from taxes, as tariffs are paid when goods enter the country, while taxes are paid at the time of purchase. Donald Trump’s tariff strategy aims to strengthen the US economy by targeting imports from Mexico, China, and Canada. In 2024, Mexico led as the top exporter to the US with $466.6 billion in exports, making up 42% of total US imports. The statements in this article are forward-looking and carry risks. This information is for educational purposes and not an endorsement for trading assets. It comes with risks, including the possibility of losing your entire investment.The Dynamics of Diplomatic Movement
The official’s comments suggest that diplomatic efforts between India and the US are approaching a limited agreement. With a provisional trade deal expected before July, stakeholders have a brief time to assess the changes ahead. This indicates a joint effort to resolve tariff issues and enhance trade between the two countries, which could impact contracts tied to sensitive industries. The goal of finalizing the deal by autumn 2025 allows for gradual changes rather than sudden disruptions. China’s involvement is also noteworthy. The discussions on rare earth magnets pertain to materials crucial for defense, electronics, and renewable energy sectors. If Beijing responds positively, supply chain issues could be alleviated, potentially lowering costs in the medium term, assuming no new tensions develop. Currency movements often reflect geopolitical changes. The dollar index’s 0.20% dip may seem small, but combined with the USD/INR rate near 86.15, it indicates a weaker dollar against a stronger rupee. This shift can impact speculative products and cross-currency risks, leading to narrower spreads and adjustments in risk-return profiles. By explaining tariffs as entry fees compared to purchase-time taxes, we highlight their impact on import costs rather than retail prices. This distinction affects forward pricing strategies, shipping contracts, and market volatility. Anyone holding derivatives related to transportation, commodities, or storage should consider these changes in costs now. Trump’s tariff strategy focuses on leveraging duties to influence trade partners. Mexico’s significant export volume to the US, over $466 billion, puts it in a position of direct exposure. This exposure impacts not just broad economic trends but also specific country risks and currency pairs. How businesses and policymakers respond to this pressure is an important factor to monitor. When tariffs increase—especially as policy tools rather than just revenue sources—they affect capital and financing for exporting companies. Such adjustments can complicate high-frequency trades and cross-border logistics. The implications extend beyond goods, possibly increasing risks in swap spreads and credit default probabilities in busy trade areas. It’s important to note that forward-looking statements include disclaimers for a reason. They represent possibilities, not guarantees, and involve political speculation combined with economic analysis. This is where we allow for wider error margins. Outcomes may shift, but they are not fixed. We will adjust our positions based on these probabilities. Create your live VT Markets account and start trading now.Italy’s Consumer Price Index shows a -0.1% change, missing expectations
Italy’s Consumer Price Index (CPI) fell by 0.1% in May, which was lower than the expected 0% change. This drop indicates a reduction in consumer prices during that period.
The CPI measures inflation by tracking the average change over time in prices that consumers pay for goods and services. The decrease in CPI points to a loss of purchasing power in May compared to the previous month.
Impact on Consumer Prices
When consumer prices decline, it may lead to greater affordability, which can impact the economy. This information is part of a wider economic view and should be used alongside other indicators for a full understanding. Italy’s unexpected 0.1% decline in the CPI for May was below what analysts anticipated, which was a flat rate. While this may seem minor, it highlights a month where prices dropped. This small change can influence multiple asset classes if it continues or if future data reflects a similar trend. In practical terms, there are interesting prospects for real yields in certain European areas, especially where inflation-related pricing is under examination. The CPI figure provides insights beyond the monthly price changes, suggesting possible shifts in short-term strategies for inflation-linked derivatives, particularly in government-related markets, where central bank reactions may become more careful.Market Reactions and Forward Guidance
Currently, expectations for short-term rate hikes in this region are low, and this data offers mild support—not disruption—to that view. Traders involved with nominal rates should avoid quick reactions and instead look at the upcoming European pricing data. A drop in key core CPI components throughout the region could lead to a more stable repricing in swaps. Rate markets are currently influenced by soft inflation readings, affecting break-even levels. Over the past months, we’ve seen that the curve is sensitive to these minor data surprises. The current decision is whether to adjust risk in expiry calendars for the summer or remain in shorter positions until clearer direction emerges from broader European data. Fabbri’s earlier signals this quarter indicated a tendency to include warnings about weak demand in fiscal updates. This now appears more like subtle forward guidance than simple caution. If we continue to see CPI underperform, interest rate volatility could increase again, especially for short-term rates. As always, be mindful of liquidity profiles during significant macro events to manage position sizes effectively before committing to any inflation-based strategy in this area. Create your live VT Markets account and start trading now.Large FX option expirations may impact EUR/USD and USD/JPY pricing ahead of central bank meetings.
Large expiries are seen for EUR/USD, specifically between 1.1500 and 1.1600. These levels are expected to keep the pair within this range unless there are significant market shifts due to headline risks. Traders will pay attention to developments in the Middle East and upcoming central bank meetings as the week begins.
For USD/JPY, a significant expiry is identified at the 145.00 mark. This level is likely to hinder any upward movement, acting as an anchor if buying pressure arises. Market conditions will influence how these levels affect trading decisions shortly.
