Currency option expiries on radar for Oct 8 NY cut
Key FX option expiries for Oct 8 include EUR/USD at 1.1150 and USD/JPY at 158.00, with bond yields driving dollar sentiment.
Two FX option expiries are in focus on 31 August: EUR/USD at 1.1600 and USD/JPY at 159.65, with dollar sentiment and intervention risks as key drivers.
Only a pair of expiry levels are worth noting on the day.
The first expiry is for EUR/USD at 1.1600. The US dollar rebounded on Friday following a more hawkish statement from Fed Chair Warsh at the Jackson Hole symposium. This has largely set the direction for major currencies heading into the new week.
For EUR/USD, the decline brings the pair near the 100-day moving average at 1.1570. That level should provide support during the session. The options above may also cap any upside, given the lack of other catalysts in European trade later.
Provided the dollar does not strengthen further, these levels should keep EUR/USD contained until the expiries expire.
Currently, dollar sentiment remains the primary driver, with the probability of a Fed rate move in September now near a coin toss.
Additionally, watch for month-end effects that could create volatility later today. As noted earlier, Heads up: Month-end flows might factor into play in the day ahead.
There is also a USD/JPY expiry at 159.65. However, as previously noted, such options have limited impact given the current environment.
The focus is on intervention risks. USD/JPY has climbed back to near 160, testing the tolerance of Japanese and US authorities. This factor outweighs options in driving USD/JPY moves.
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Key FX option expiries for Oct 8 include EUR/USD at 1.1150 and USD/JPY at 158.00, with bond yields driving dollar sentiment.
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