Insights 
VT 
Key USD/CAD Expiries
For USD/CAD, options expire at 1.3860 (US$743.8m), 1.3850 (US$556m), and 1.3730 (US$495m). Meanwhile, other notable pieces of information include discussions surrounding US tariffs on EU goods affecting EURUSD.
There is also increased focus on US jobs data as the yen shows strength, linked to wage trends in Japan. Additionally, Canada has delayed its electric vehicle sales target to 2026 due to tariff-related pressures.
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We are seeing significant pressure on the Euro due to the threat of new 15-20% US tariffs on EU goods. This political risk suggests buying put options on EUR/USD could be a prudent strategy to hedge against further downside. Recent data showing Eurozone manufacturing PMI contracting for the third straight month at 48.5 in August 2025 reinforces this bearish outlook for the coming weeks.
Potential Rate Hike in Japan
The big shift we are watching is in Japan, where rising wages are forcing the Bank of Japan to consider a rate hike, possibly as soon as October. Japan’s nominal wage growth of 3.1% year-over-year for July 2025, the highest in nearly three decades, makes a hawkish pivot much more likely. Therefore, we anticipate continued yen strength, making USD/JPY put options or bearish call spreads attractive strategies.
All eyes are on the US non-farm payrolls report due out later today, which will be a major driver for the US dollar. A strong number above the consensus forecast of 170,000 could reignite expectations of another Fed rate hike, while a miss could confirm the dollar’s recent weakness. Implied volatility on dollar pairs is elevated, so traders should be prepared for a sharp move following the release.
For AUD/USD, the global risk-off sentiment from trade tensions is a significant headwind, as are falling commodity prices. We’ve seen iron ore prices drop over 8% in the past month, which puts a ceiling on the Aussie. Similarly, with Canada delaying its EV targets amid tariff concerns and oil prices struggling to gain traction, we see more risk to the downside for the Canadian dollar.
