The USD continued its upward momentum with modest gains today, unchanged against JPY and slightly higher against other major currencies. Increases include 0.05% against GBP, 0.12% against CAD, and 0.21% against EUR and AUD. The biggest gain was 0.25% against NZD.
Economic events today include advanced goods trade balance data, expected at $-98.20 billion, and updates on wholesale and retail inventories for June. Wholesale inventories fell by -0.3%, while retail inventories rose by 0.2%. Case Shiller housing price data, US consumer confidence, and JOLTS job openings will also be released.
Company Earnings And Stock Records
Several companies reported earnings today, with most beating expected figures. Earnings include Boeing’s EPS of $-1.24 and revenue of $22.75 billion, and PayPal’s EPS of $1.40 with revenue of $8.29 billion. The US stock indices closed at record levels, with notable increases in the Dow, S&P, and NASDAQ.
US debt market yields saw a slight decline after rising yesterday. Other markets show crude oil up by 0.18% and gold increasing by 0.18%. Silver decreased by -0.23%, while Bitcoin experienced a rise of $518.
Given the dollar’s sharp rise, we are watching for signs of exhaustion in the coming weeks. While the greenback is holding its gains today, July 29th, 2025, the retracement during the European session suggests the upward momentum could be slowing. We must identify key technical levels that, if broken, would signal a deeper pullback.
The upcoming economic data will be crucial for our strategy. The expected drop in JOLTS job openings to 7.5 million continues a cooling trend we’ve seen since the post-pandemic peak of over 11 million job openings. A weaker labor market could soften the Federal Reserve’s stance, potentially capping the dollar’s rally.
Derivatives Strategy
Similarly, we are cautious about the consumer confidence figure. While an increase to 95 is expected, this is still far below the 103.0 reading from July of last year, indicating that underlying consumer health may be fragile. This, combined with falling monthly home prices, paints a mixed picture that doesn’t support unchecked dollar strength.
For our derivatives positions, this uncertainty suggests buying options rather than taking outright futures positions. We are considering at-the-money EUR/USD put options expiring in the next 30 to 45 days. This strategy allows us to profit from further dollar strength while strictly limiting our potential loss if the trend reverses.
With US stock indices near record highs, market volatility is likely low. We believe this presents an opportunity to buy cheap protection against unforeseen events, such as a negative turn in the US-China trade talks. We are looking at purchasing out-of-the-money call options on the VIX index as a cost-effective hedge.
The strong earnings from companies like Boeing and Royal Caribbean point to continued strength in the industrial and travel sectors. To capitalize on this, we are exploring call options on relevant sector ETFs. The positive results suggest these areas may have more room to run, even if the broader market consolidates.
