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Switzerland’s trade surplus falls to CHF 4.59 billion in July due to rising imports and declining exports
Switzerland’s trade surplus fell in July, dropping to CHF 4.59 billion from CHF 5.79 billion. This decrease happened due to a 1.2% rise in imports and a 3.8% drop in exports.
The trade data for July shows a noticeable shrinking of our surplus, mainly because of the 3.8% decline in exports. This suggests that global demand is weakening, especially for our high-value goods like pharmaceuticals and watches. This situation is likely putting negative pressure on the Swiss franc.
Key FX option expiries for EUR/USD affecting market movements before US trading
FX option expiries today highlight EUR/USD at the 1.1670 and 1.1700 levels. The 1.1670 level is close to important hourly moving averages of 1.1664-68, which may limit upward movement during today’s trading.
The 1.1700 expiry could also act as a barrier, restricting price increases until US trading starts. Key events for the euro include French and German PMI data, while the dollar’s focus remains on news from the Federal Reserve.
Educational Opportunities
You can find educational resources for a better understanding of how to use this data in trading. InvestingLive also provides insights into current market movements. There is notable option interest at the 1.0800 level for today’s New York cut. This concentration is likely to act as a magnet, potentially limiting any upside for EUR/USD in the short term. Traders should monitor price action to see if it stalls around this key strike price as the expiry approaches. Reflecting back, during this time in 2021, we saw major option barriers clustered higher, near 1.1700. The trading landscape has changed since then, now focusing on a lower range. This shift highlights the dollar’s continuous strength over the past few years.Market Expectations
This week’s flash PMI readings show a cautious outlook for the euro. The S&P Global Eurozone Composite PMI registered a contraction at 49.5, while the US reading stayed in expansion territory at 51.2, emphasizing the economic divide. This data suggests a weaker outlook for the euro. All attention is now on the Jackson Hole symposium starting tomorrow for insights on monetary policy. With the latest US CPI at a stubborn 3.5% and Eurozone inflation easing to 2.8%, we are on the lookout for any signals of policy divergence between the Fed and ECB. Derivative traders should prepare for potential volatility based on the central bankers’ comments. Create your live VT Markets account and start trading now.VT Markets Secures SCA License to Strengthen its Commitment to Regulatory Excellence
18 August 2025 – VT Markets is proud to announce the successful acquisition of its Securities and Commodities Authority (SCA) Category 5 license for its Dubai branch under license number 20200000299, which permits the regulated activities of introduction and promotion within the UAE. This marks a significant step forward in establishing VT Markets (Pty) LTD – Dubai Branch, referred to as VT Markets Dubai, as a trusted financial services player in the region.
The Securities and Commodities Authority (SCA) is the federal financial regulatory agency in the United Arab Emirates, ensuring transparency, market integrity, and investor protection in the country’s financial markets. This license empowers VT Markets to introduce and promote secure, transparent, and high-quality services to clients in the UAE, further solidifying its position as a trusted leader in the global trading industry,
“The acquisition of the SCA Category 5 license reflects our commitment to the highest standards of regulatory compliance. This achievement not only enhances our ability to operate in a secure, transparent, and compliant manner, but it also reinforces our position as a trusted financial services provider in a rapidly evolving market. As we continue to prioritize the integrity of our operations, this milestone strengthens our ability to offer our clients introductions to regulated and licensed financial institutions that will offer them a safe and reliable trading environment in this dynamic region,” shared Ahmed Ismail Iman, Head of Compliance, VT Markets Dubai.
The SCA license is a crucial part of VT Markets’ ongoing expansion efforts and plans to continue strengthening its presence and adding more licenses to its portfolio. As part of its vision, VT Markets plans to continue broadening its reach by securing additional licenses in strategic regions, ensuring its ability to offer regulated and compliant services worldwide.
About VT Markets
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Calm Asia-Pacific session sees limited currency movement without new market catalysts
The Asia-Pacific session was mostly calm, with little change in key asset classes. China and Kazakhstan are working to strengthen trade relations, while the EURUSD could reach 1.20 due to a weaker USD.
The Russian central bank is considering changing interest rates due to rising inflation. GBP and EUR pairs may experience fluctuations ahead of PMI data. Gold futures are down as of August 21, 2025. The UN is calling for a ceasefire in Gaza, and Meta has paused AI hiring after a company reorganization.
Current Financial Partnerships
Today, the PBOC set a stronger USD/CNY mid-point at 7.1287, which was above expectations. CME and FanDuel are teaming up to provide event contracts for financial markets. Nomura is betting against the USD as the Jackson Hole event approaches, and Japan’s flash manufacturing PMI increased to 49.9. The PBOC is expected to set the USD/CNY rate at 7.1748. Nordea foresees a decline in USDNOK and an increase in EURNOK. The session remained stable with limited market movements, as previous Fed events didn’t have a significant impact. The AUD is the weakest currency today, with the EUR leading. The ASX200 rose by 0.68%, while the Nikkei fell by 0.49%. Oil prices increased by 0.35%, and gold prices decreased by 0.26%. Next, the focus will shift to flash PMI data from the EU, UK, and US, along with US claims data, before the awaited Jackson Hole symposium and Powell’s speech.Market Uncertainty Before Jackson Hole
The market is quiet now, but we are anticipating the Jackson Hole symposium. The last Fed minutes seem outdated, as they do not reflect the recent significant changes in labor market data. This uncertainty may prompt us to consider buying volatility, as Powell’s speech could lead to a significant market reaction. We’ve seen similar situations before, like in August 2022 when Powell’s brief, stern speech caused the S&P 500 to drop over 3% in one day. Buying straddles on major indices like the SPX or on currency pairs like USD/JPY could be a wise approach to prepare for any sharp market movements. This strategy benefits from significant price changes, regardless of direction. There is a strong expectation that the US dollar will weaken, with some analysts predicting a EUR/USD target of 1.20. This outlook is backed by recent Eurozone CPI data for July 2025, which shows core inflation remaining steady at 2.8%, indicating that the ECB may need to maintain a hawkish stance longer than the Fed. We might look into buying EUR/USD call options to take advantage of this potential upward trend. We’re closely monitoring China after the PBOC set a stronger-than-expected reference rate for the yuan today. This decision follows China’s manufacturing PMI for July 2025, which was 49.5, signaling ongoing economic slowdown that the authorities are trying to control. The Australian dollar is already showing weakness today, so we could consider using put options on AUD/USD to navigate this regional uncertainty. In the short term, all attention is on the flash PMI data from the UK and Europe. We expect implied volatility to rise ahead of these reports, similar to what we saw before the significant drop in sterling after disappointing PMI results in late 2024. Purchasing short-dated options on GBP/USD could be an opportunity to capitalize on immediate price movements following the announcement. Create your live VT Markets account and start trading now.This week, headlines about Cook and Trump may impact market confidence in the Fed’s independence.
Lisa Cook, a member of the Fed’s board of governors, is facing pressure to resign due to mortgage fraud allegations. This push for her resignation comes mainly from US President Trump, who may see a political opportunity in this situation.
This issue is part of Trump’s larger plan to reshape the Fed by replacing individuals within the organization. Despite this political turmoil, markets have remained steady after the Fed released minutes focusing on inflation concerns, although this happened before the disappointing jobs report on August 1.
Fed Minutes and Market Stability
The released minutes do not capture the growing dovish feelings within the Fed. However, the Fed’s core stance remains strong, which increases the pressure on their messaging ahead of the FOMC’s blackout period that starts on September 6. As these events unfold, Cook’s situation could draw more attention. There are concerns that Trump’s influence might gradually weaken the Fed’s independence, which could impact market confidence in US financial assets. The political pressure on Fed Governor Lisa Cook is creating uncertainty. This comes at a time when the Fed’s minutes may be outdated, as they do not reflect the poor jobs report from August 1st. That report showed only 50,000 jobs were added, much lower than expected. This is leading the market to expect the Fed will become more dovish. This shift is seen in interest rate derivatives. The CME FedWatch Tool now shows a 60% chance of a rate cut in September, up from just 20% before the disappointing job data. This makes any statements from Fed officials critical in the next two weeks leading to the September 6 blackout period.Market Volatility and Political Interference
The conflict between political pressure and weak economic data is increasing market volatility. The VIX, which measures expected market turbulence, has risen from about 14 in July to over 19. This suggests traders are actively seeking protection. Options traders might want to consider buying VIX calls or out-of-the-money puts on major indices as a safeguard against sudden market fear. Looking back, we remember President Trump exerting similar pressure on the Fed during his first term, especially against Chair Powell in 2018. Eventually, the market began to account for this political risk, and we may be seeing the start of a similar situation now. The gradual erosion of the Fed’s independence often raises questions about the long-term value of the US dollar. As a result, some investors are shifting towards traditional safe havens. Gold futures have quietly risen over 3% this month, indicating a move towards safety. It could be a wise strategy to consider positioning for further gains in gold through futures or options on gold-related ETFs, especially if trust in US institutions continues to diminish. Create your live VT Markets account and start trading now.Most economists expect the BOJ to raise interest rates to 0.75% by the end of the year.
A recent Reuters poll from August 21, 2025, asked economists about the Bank of Japan’s (BOJ) interest rate decisions. Most of them, about 92%, believe there will be no changes in the next policy meeting in September. Yet, 63% think the BOJ will raise rates to 0.75% in the fourth quarter of 2025, up from 54% last month. Among the 40 economists who provided a timeline, 38% expect the change in October, 18% in December, and 30% in January next year.
Additionally, 22 out of 29 economists support the US-Japan trade deal. However, 21 of 31 are worried about increased fiscal pressure after the Liberal Democratic Party’s loss in the upper house elections. Currently, markets anticipate about a 17 basis point rate hike by the end of the year. The BOJ’s current leadership tends to prioritize caution, focusing on avoiding risks instead of making bold moves.
Consensus Opportunity And Pressure
Economists are increasingly agreeing on a BOJ rate hike to 0.75% by the end of the year. However, interest rate markets are only factoring in a much smaller hike of 17 basis points. This mismatch highlights a clear opportunity. Strong economic data is putting pressure on the BOJ to act. Japan’s core inflation for July 2025 remains above the BOJ’s 2% target, sitting at 2.5%. This is supported by significant wage growth, with final figures from the 2025 Shunto negotiations showing raises over 5% for the second consecutive year. These elements make it harder for the BOJ to keep its current policy. As we approach the September policy meeting, over 90% of economists expect no changes. This consensus might indicate that short-term options on Japanese government bonds or the yen could be pricing in too much risk. Traders might consider strategies that benefit from this expected stability in the coming weeks.The Fourth Quarter Focus
The focus should turn to the fourth quarter, especially the October meeting, which is considered the most likely time for a rate hike. With the yen currently weak, around the 158 level against the dollar, a rate increase would help strengthen the currency. The difference between the market’s 17 basis point expectation and a potential 65 basis point increase to 0.75% presents a trading opportunity. However, we must remember that under Governor Ueda’s leadership, the BOJ tends to be careful. Their historic decision to end negative interest rates in March 2024 was a well-managed and small step. This history suggests that while a rate hike is indeed on the way, preparing for a single, aggressive move might not be the best strategy. Instead, be ready for a gradual tightening process. Create your live VT Markets account and start trading now.China and Kazakhstan discuss improving trade relations and enhancing cooperation efforts
China’s commerce minister has committed to strengthening trade ties with Kazakhstan, focusing on new sectors and innovative trade methods. The minister highlighted China’s willingness to partner with Kazakhstan to improve their trade relationship.
He stressed the need for cooperation in new areas to speed up these efforts. The objective is to develop fresh trade formats that benefit both countries.
Commodities Outlook
This announcement boosts optimism for major industrial commodities due to Kazakhstan’s significant production role. We can expect China to demand more Kazakh oil, uranium, and copper. Over the next few weeks, consider taking long positions in futures contracts for Brent crude and LME copper. Bilateral trade has already surged, reaching $45 billion in the first half of 2025, a 15% increase from last year. This continuous growth suggests that the new agreement will lead to real trade volume, potentially tightening global supply of these resources. As a result, call options on key commodity-linked ETFs could be a smart way to manage risk while capitalizing on this trend. The reference to “emerging fields” likely indicates a focus on green energy and technology, highlighting Kazakhstan’s important uranium and rare earth metal reserves. China is advancing its nuclear energy program, and we witnessed uranium prices rise significantly in 2023 and 2024 due to supply concerns. This new collaboration could establish a stable demand for uranium, making investments in uranium miners and related futures appealing.Investment Implications
From a currency standpoint, this strengthened relationship should support the Kazakh Tenge (KZT). The KZT has shown surprising strength this year, and increased Chinese investment could further enhance its value against the dollar. Traders might consider options on the USD/KZT pair, positioning for potential gains in the Tenge. This development also indicates a renewed focus on China’s Belt and Road Initiative projects, which had slowed in recent years. Keep an eye out for news related to infrastructure and logistics. This creates opportunities for call options on specific Chinese construction and engineering firms, as well as Kazakh transportation companies. Create your live VT Markets account and start trading now.ING predicts EUR/USD may reach 1.20 by year-end due to USD weakness and eurozone growth
**Foreign Demand for Eurozone Assets**
The EUR/USD exchange rate is expected to reach 1.20 by the end of 2025 and 1.22–1.25 by late 2026. However, several risks could affect this prediction, including ongoing US inflation, a strong job market, geopolitical tensions, potential US tariffs on the EU, and European political issues like French fiscal risks. Currently, the exchange rate is just over three figures away from these targets.
With a high chance of a Federal Reserve rate cut in September, we foresee EUR/USD climbing up. The July 2025 jobs report showed a gain of only 95,000 jobs, well below the expected 180,000, indicating a weakening US labor market. Fed Funds futures now suggest an 85% probability of a 25 basis point cut next month, which could weaken the dollar.
Derivative traders might want to position themselves for this rise by targeting the 1.20 level by year-end. Buying EUR/USD call options expiring in December 2025 allows for potential profits from this expected increase while limiting risks. Bull call spreads could also be considered to lower initial costs, especially as implied volatility might rise before the Fed meetings.
**Strength of the Euro Side**
The euro’s outlook looks positive, supporting expectations for the pair to rise. Germany’s ZEW Economic Sentiment index recently reached an 18-month high in August 2025, indicating that potential fiscal stimulus is boosting confidence. This is a sharp contrast to the declining sentiment in the US.
As the Fed begins to cut rates, the costs for holding non-dollar assets will decrease, encouraging large funds to sell US dollar holdings. We are already seeing strong foreign demand for eurozone assets, and this trend is likely to grow. This selling pressure on the dollar may lead to a self-fulfilling rally in the euro.
We must note that the 1.20 level is a significant technical barrier, acting as major resistance due to a double-top formation from early 2021. As we move closer to this level, selling pressure is expected, so traders should plan to take profits or adjust positions. Historical trends suggest that the climb may not be straightforward.
The main risk to this outlook is persistent US inflation, which could cause the Fed to delay or reduce its planned cuts. The latest July 2025 CPI reading of 2.8% has cooled, but it still exceeds the Fed’s target. To hedge against sudden market changes, traders could buy inexpensive, out-of-the-money puts to protect long positions if the US job market unexpectedly strengthens.
Create your live VT Markets account and start trading now.
A central bank official suggests potential interest rate cuts this year, but geopolitical inflation risks remain.
The Russian central bank is thinking about lowering interest rates if inflation goes down. However, it might keep the rate at 18% for the rest of the year because of ongoing geopolitical risks.
A high-ranking official from the bank indicated that if inflation falls quickly, the rate could decrease this year. However, the bank’s outlook also suggests that the rate might stay at 18% until the end of the year.
Geopolitical Factors
Geopolitical issues remain a concern, potentially causing inflation to rise. The bank is careful about these inflationary risks, which affect its interest rate choices. The Russian central bank is sending mixed messages, creating a unique opportunity in the derivatives market. They hinted at a possible rate cut, but may also maintain the 18% rate because of ongoing risks. This uncertainty is something traders need to pay attention to in the upcoming weeks. Recently, inflation in Russia has improved, with July 2025 figures showing a drop to an 8.5% annual rate, down from over 11% earlier this year. This supports a potential rate cut since the central bank has noted that lower inflation is necessary for a more relaxed policy. However, a rate cut might put short-term pressure on the ruble. Yet, the geopolitical situation is still a significant risk that could lead the bank to keep rates high to protect the currency. Ongoing talks about tightening energy sanctions have kept the markets on edge. In 2022, the central bank quickly raised rates to stabilize the ruble, reminding us of how rapidly they can act.Market Volatility
This uncertain outlook is causing increased price volatility. One-month implied volatility for USD/RUB options has surged to over 35%, a jump from the low 20s just a month ago. This increase shows that the market expects considerable movement for the ruble, but is unsure which way it will go. Given this high volatility, traders might want to explore strategies that benefit from significant price changes in either direction. Buying option straddles or strangles on the ruble could be effective, as they would gain from either a surprise rate cut or a geopolitical shock causing a sharp move. The current pricing indicates that a period of calm is not likely. For those focused on interest rates, this uncertainty offers clear opportunities. Traders are engaging in interest rate swaps that would profit if the central bank keeps rates steady at 18% through the end of the year. Others, however, are betting on a series of cuts starting as soon as the next meeting. Create your live VT Markets account and start trading now.Implied volatility levels for GBP and EUR pairs provide insights on support and resistance ahead of data.
Implied volatility levels for GBP and EUR currency pairs are important to watch before the release of the EU and UK flash PMI data. Key levels for pairs like GBPUSD, EURUSD, and EURGBP give clues about potential market movements.
For EURUSD, resistance is at 1.1700 and support is at 1.1600. In EURGBP, resistance is 0.8680 and support is 0.8630. EURJPY has resistance at 172.400 and support at 170.900. GBPUSD shows resistance at 1.3520 and support at 1.3400. The GBPCHF pair has resistance at 1.0850 and support at 1.0760, while GBPJPY lists resistance at 199.00 and support at 197.00.
