The USD has strengthened at the beginning of the US trading session. Japan’s GDP figures released overnight have boosted their currency, weakening the USD.<\/p>\n
The EURUSD rose above the 100 hour moving average at 1.1662, edging toward resistance at 1.1700. The GBPUSD saw a modest increase, facing resistance at 1.3561, with a swing area between 1.3576 and 1.35918 previously halting rallies.<\/p>\n
Key economic data is scheduled for release at 8:30 AM ET. This includes NY Fed Manufacturing for August, Import and Export prices for July, and Retail Sales. Additionally, Canadian Manufacturing Sales data is projected at 0.4% for June.<\/p>\n
Fed’s Goolsbee will speak today after a neutral stance in yesterday\u2019s remarks. The PPI report suggested core PCE increases around 0.26% later this month.<\/p>\n
The Fed remains expected to cut interest rates by 25 basis points, a 94% probability, with decreased likelihood for further cuts this year.<\/p>\n
The Trump-Putin Summit on Ukraine later today aims for a ceasefire and a second meeting with Zelenskiy, with potential discussions on arms control. Possible sanctions on Russia, notably related to oil imports, could escalate.<\/p>\n
US stocks are mixed with the Dow up 277 points, S&P up 10.46 points, and Nasdaq down 4.44 points. US debt market yields show minimal changes across tenures.<\/p>\n
With the Federal Reserve almost certain to deliver a 25 basis point rate cut this year, our focus should shift to the future pace of easing. We have seen core inflation metrics, like the PCE deflator, cool from over 3.5% in 2024 to a more manageable 2.8% in the second quarter of this year. Therefore, options on SOFR futures could be used to position for a potentially slower series of cuts than the market currently expects.<\/p>\n
The Trump-Putin summit on Ukraine today presents a significant binary risk for energy markets over the coming weeks. A breakdown in talks could lead to severe sanctions targeting Russian oil exports, echoing the volatility we saw in 2022 when WTI crude futures shot past $120 per barrel. Buying call options on oil or energy stocks offers a way to hedge against a sudden price spike if diplomacy fails.<\/p>\n
Even as the S&P 500 sits at a record high, we see signs of complacency that derivative traders should note. The VIX, a measure of expected market volatility, has been trending below 14 for most of the summer, a level not consistently seen since before the pandemic. This suggests that index put options are relatively cheap and could serve as an effective portfolio hedge against any negative shocks.<\/p>\n
In the currency market, the EURUSD is testing the 1.1700 resistance level again, supported by a European Central Bank that remains more hawkish than the Fed. Eurozone services inflation has proven sticky, remaining above 4% in the latest July 2025 report, which limits the ECB’s ability to cut rates. A decisive break above this level could trigger further upside, making short-term call options on the euro an interesting play.<\/p>\n
We are also watching the GBPUSD, which is again failing at the 1.3576 to 1.3591 resistance area, a pattern we’ve observed multiple times this month. The Bank of England has signaled it will hold rates steady through the autumn, creating a well-defined range for the currency. This environment is ideal for traders looking to sell options premium, such as through an iron condor strategy, to profit from the pound remaining range-bound.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EURUSD climbs above 100-hour average; Fed rate cut likely; Trump-Putin summit eyes Ukraine ceasefire.<\/p>\n","protected":false},"author":62,"featured_media":17023,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t