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.
The yen hit a six-month high against the dollar as BOJ hike bets built, while China's August imports missed forecasts and the Kospi gained nearly 2%.
Summary:
Crude traded quietly on Tuesday, and the Middle East produced only one new headline: a Houthi missile-and-drone attack on Khamis Mushait and Abha airport in Saudi Arabia, an event far too limited to move the broader market.
Gold was little changed as there was no fresh news to drive trading.
The yen was the main market mover. Building on a recent rally, it reached a six-month high against the dollar, and at one point USD/JPY dipped below 153.00. A more positive view of the currency emerged from speculation that the Government Pension Investment Fund might change how it allocates assets, along with growing conviction that the Bank of Japan would deliver faster rate increases, analysts said. The day's numbers also strengthened that outlook: solid July pay growth and a higher second-quarter GDP estimate both made a stronger case for BOJ tightening when the meeting takes place next week.
Japan's stock market paid the price for the firmer yen: the Nikkei could only muster a tiny 0.07% rise in morning trade, with currency strength cancelling out bargain-hunting in other parts of the market. South Korea's Kospi turned in a much stronger performance, climbing almost 2% in the morning session thanks to widespread buying.
The Australian and New Zealand dollars both came under modest pressure. The Australian dollar lost ground following the NAB survey, which revealed a slide into negative territory for business conditions, a steep drop in profitability and a corresponding retreat in confidence. More significant for the AUD was the news, first carried by Reuters on August 6, that CMRG had ordered some steel mills to pull out of Rio Tinto negotiations. With September now under way, that order appears to be taking hold, and it strengthens Beijing's position in the annual iron ore bargaining. The New Zealand dollar also faced light pressure from RBNZ Monetary Policy Committee member Prasanna Gai, who suggested the key rate might already be at a neutral setting.
The last economic release of the session was China's August trade numbers. Shipments from China came in exactly at the expected level and quickened versus July, a confirmation of the export-led expansion that has shaped China's year so far, with high-tech goods, cars and semiconductors doing most of the work. Imports drew more attention. Growth of 28.2% fell short of the 30% projection, an indication that the internal demand upswing investors were waiting for remains slower than anticipated, although the pace still represents a clear step up from July.
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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.
EUR/GBP has fallen to its lowest since June 2025, adding to signs of euro weakness amid France's fiscal troubles and broader market concerns.
USDCHF traded above its 100- and 200-hour moving averages near 0.83291, but buyers still lack strong upside momentum.
USDCAD bounced off the 200-hour MA and crossed back above the 100-hour MA, keeping the uptrend intact.