• Huge €3-billion 1.1500 fx option strike expiry at 10-am New York/14.00 GMT Friday - more strikes surround

• Related hedging flows can help draw/contain FX. DTCC traded options data shows plenty more at 1.1500 next week

• EUR/USD hit low since late July at 1.1456 post Fed and consolidates higher - 1.1475-92 (EBS) Friday

• Daily cloud now above spot to provide tech resistance but EUR/USD appears to lack downside impetus

• FX option implied volatility at long term lows with a very small downside over topside strike premium

• Price action consistent with ongoing low volatility within longer term range, with a mild downside lean
EUR/USD daily chart (EBS)


EUR/USD FX option strike expiries Sept 18-25

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY FX option implied volatility hit hard after BoJ press conference couldn't offset dovish hike disappointment

• FX options had been primed for excessive FX volatility which inflated short dated expiry implied volatility pre BoJ

• Funds were said to have been holding downside strike options looking for hawkish BoJ outcome

• Those options now being unwound and are fuelling the broader implied volatility sell-off

• 1-week USD/JPY implied vol hit 10.5-9.0 so far and the benchmark 1-month from 9.0 to 8.5

• Topside hedges still in play - 160.00 bought earlier this week and more since BoJ

• Intervention risk will increase if USD/JPY continues to unwind the early Sep drop from 160.00 to 153.001-week and 1-month expiry USD/JPY FXO implied volatility Click here

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD rose to 0.7136 in Asia, its highest level since Wednesday

• Ascent influenced by hawkish shift in RBA expectations on Bullock

• RBA chief Bullock warns inflation risks materializing

• Markets now see 95% chance of RBA rate hike to 4.6% on Sept 29

• Wednesday high was 0.7141 - before drop to 0.7075 on Fed's hawkish hike

• 0.7075 was four-week low, which the 100-day moving average helped define

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• FX option strikes expire at 10am New York/14:00 GMT on Friday September 18

• EUR/USD: 1.1400 (5.2BLN), 1.1425-30 (763M), 1.1445-50 (2.8BLN), 1.1470-75 (1.7BLN), 1.1500 (3BLN),

• 1.1510-15 (1.9BLN), 1.1520-25 (1.1BLN), 1.1550-60 (1.5BLN)

• USD/CHF: 0.8250 (264M), 0.8265-75 (1BLN), 0.8300 (1BLN).

EUR/CHF: 0.9500 (347M)

• GBP/USD: 1.3300 (597M), 1.3330-40 (250M), 1.3350-60 (300M), 1.3400-15 (284M), 1.3440 (720M)

• EUR/GBP: 0.8550-60 (314M), 0.8595-0.8600 (251M), 0.8610 (560M)

• AUD/USD: 0.7075 (575M), 0.7100 (580M), 0.7170 (401M), 0.7200 (2.2BLN)

• NZD/USD: 0.5700 (553M), 0.5725 (400M). USD/CAD: 1.3955 (385M), 1.4000 (509M), 1.4060 (387M)

• USD/JPY: 155.00 (5.5BLN), 155.50 (877M), 156.00-10 (1.2BLN), 156.50 (846M), 157.00 (1.6BLN), 159.00 (1BLN)

• Thursday's FX options wrap - Primed for BoJ shock amid post-Fed stasis (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/KRW edges up to 1385.7 as it steps into bullish path

• Fri close above 1381.4 engages Bollinger uptrend channel

• But a key chart barrier just slightly above may deter buyers

• Closing above 50% retracement 1387.8 needed to clear the way

• USD/JPY rally in the wake of as-expected BOJ hike inspires longs

• S. Korea: commercial viability hinders US investment talks
KRW

(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• GBP/USD holds near 7-week low in Asia after closing 0.15% lower Thursday

• Undermined by BoE holding rates steady while other major central banks hike

• BoE pauses all active gilt sales for 6 months in surprise move

• EUR/GBP hovers 2-mth high; a daily close above 100-day MA at 0.8594 bullish

• 1.3344, 61.8% Fibo of June-Aug rally under threat, break opens 1.3265-75

• Interim supports 1.3335, 1.3300; resistance 1.3400-05, 1.3445-50

• Thu range 1.3337--1.34065, Asia 1.3335-1.3367
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• Australian gold stocks rise as much as 3.6%, their biggest intraday pct rise since August 20

• Gold stocks rise as bullion prices edge higher, supported by lower oil prices and a weaker U.S. dollar [GOL/]

• Sector majors Evolution Mining and Northern Star Resources rise 3.2% and 2.6% respectively

• YTD, AXGD sub index down 0.7%, flat for the week

(Reporting by Paridhi Minda in Bengaluru)

• AUD/USD flatlines Fri as RBA cohort appears before parliamentary committee

• Governor Bullock says upside risks to inflation appear to be materialising

• Futures pricing now implies 95% probability of 25 bps RBA hike on Sep 29

• Middle East war expansion continues as Saudis & Houthis exchange fire

• President Trump meeting Chinese leader Xi Jinping in Washington next week

• 0.7078 100-DMA may provide short-term support, downside open to 0.6920 below

• Range Asia 0.71095-18 support 0.7078 0.6920, resistance 0.72825 0.7661
DXY Daily 55/100/200-DMA


AUD Daily 21/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD broadly bid on possible Oct Fed rate hike view, USD/JPY on pre-BOJ hold

• USD/JPY range yesterday 155.34-156.30 EBS, 155.88-156.14 so far

• Could be inside day till the BOJ announcement, maybe into Gov Ueda presser

• For the yen to regain upward momentum, very hawkish BOJ hike needed

• JGB-US Treasury interest rate differentials wider still overnight

• In 2s to 287 bps before fall back to 283 bps, 10s 201 bps to 199 bps

• Technically, USD/JPY holding below flat daily Ichimoku tenkan at 156.64

• Hourly chart shows support at 155.20-66 Ichimoku cloud, 100-HMA 155.08 below

• Option expiries today include 154.00-50 total $1.2 bln, 155.00 $5.5 bln

• Also 155.50/75 total $1.3 bln, 156.00-10 $1.2 bln, 156.50/157.00 $2.4 bln

• These expiries likely to help contain spot action maybe even after BOJ

• Related comments , , ,

• And , , also

• On BOJ , , on US pressure

• US markets , , ,

• On US data , for more click on [FXBUZ]

USD/JPY:


Japan's terminal rate:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD +0.5% from Thur 0.5705 post-FOMC low as markets begin to recalibrate

• NZ Aug trade balance -1.35 bln (prior -1.95), annual trade balance -5.44 bln

• Middle East war expansion continues as Saudis & Houthis exchange attacks

• President Trump meeting Chinese leader Xi Jinping in Washington next week

• NZD downtrend remains intact, break below 0.5700 puts 0.5627 ytd low at risk

• Range NZ 0.5731-40, support 0.5700-05 0.5627, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.5% from Thur post-FOMC 0.7075 low, eyes shifting to RBA outlook

• RBA officials (including Bullock) before parliamentary committee on Fri

• Futures pricing implies 85.0% chance of RBA policy rate hike on Sep 29

• Saudi Arabia & Houthis exchange fire as Middle East war continues to spread

• U.S. President Trump to meet with Chinese leader Xi Jinping next week

• AUD hourly Bollinger bands narrowing, DXY -0.1% from recent highs

• 0.7078 100-DMA may provide short-term support, downside open to 0.6920 below

• Overnight range 0.71065-275 support 0.7078 0.6920, resistance 0.72825 0.7661
AUD Hourly Bollinger Study & DXY Daily 55/100/200-DMA


AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

JP Morgan likes short USD/JPY exposure into September BoJ meeting.

"Fed was a small hawk but did little to change view in USDJPY; much more important will be the BoJ tonight and the local flow picture. There was evidence enough that Ueda was at least trying to be more hawkish so now that he has had more time to prepare for this meeting - given all the hype - it will be interesting to see how he delivers the presser, for me anything that suggests we are good to keep the newly priced quarterly cadence is positive JPY," JPM notes.

"Given how well priced the meeting is, the more likely surprise here is that they go 50bp rather than unchanged. JPY longs continue to get cut at pace by DHF who are almost back to flat on the month (when USDJPY was 159) meanwhile more evidence of modest local RM demand in our franchise overnight. In other news Takaichi’s cabinet reshuffle was pretty muted and contained no market- relevant victims. Stay short USDJPY," JPM adds.

• NY opened near 1.1475 after 1.1456 traded overnight, rally then extended

• Downward moves in USD, US yields , oil helped fuel the rally

• Gold, silver and equity gains added fuel as they helped drive USD selling

• USD/CNH's drop to a fresh 3-3/4 year low contributed buoyancy to EUR/USD

• EUR/USD hit 1.1498 then dipped as USD & oil firmed in NY's afternoon

• The pair traded up +0.12% late which had daily techs warn EUR/USD bears

• Daily RSI diverged & the pair couldn't hold below the 61.8% Fib of 1.1325-1.1711
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7110 after 0.7084 traded overnight, rally extended in early NY

• USD, US yield , USD/CNH drops helped lift AUD/USD to 0.7128

• Rallies in gold, silver, copper and stocks also contributed to buoy AUD/USD

• Yields, USD firmed in NY's afternoon, AUD/USD neared 0.7115 late, was up +0.37%

• Falling monthly RSI. pair's hold below the 10- & 21-DMA are concerns for bulls

• September's monthly inverted hammer candle adds to those concerns
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

MUFG Research previews the September BoJ policy decision.

"Early tomorrow, ahead of the London open, the BoJ will announce its monetary policy decision with market pricing signalling a near 100% expectations of a 25bp rate hike to 1.25%. We certainly expect the general message from the communications to signal a clear plan to raise rates further which will go some way to endorsing the OIS rate curve priced for further hikes. It would also be consistent with the BoJ aligning itself to the coordinated efforts between Japan and the US to strengthen the yen," MUFG notes.

"That said, there is a notable risk that Governor Ueda’s comments could fall short of what markets are expecting given 90bps of hikes are priced over the next 12mths...The US-JP 2-yr spread is 30bps higher so any disappointment in Ueda matching market pricing could see USD/JPY bounce more notably higher. That said, the retracement in USD/JPY today is notable and suggests from an FX perspective the expected faster pace of BoJ tightening is becoming a more important influence on FX direction," MUFG adds

(Updates)

• Shares of gold miners gain, tracking rise in bullion prices [GOL/]

• Spot gold up 2.2% at $4,356.04 per ounce, rebounding from a near six-week low hit during previous session, supported by easing oil prices and a lower U.S. dollar, while investors assessed the latest Federal Reserve rate hike and policy cues

• Top miners Newmont and Barrick Gold each up ~3%

• U.S.-listed shares of South African miners Gold Fields

rise 3.4%, Harmony Gold jump 3.9%, AngloGold Ashanti gain 2.7% and Sibanye-Stillwater up 4.6%

• Canadian miners Agnico Eagle Mines rises 3.4% and Kinross Gold adds 3%

(Reporting by Pooja Menon in Bengaluru)

Bank of America Global Research reviews the September FOMC decision.

'The Fed sent a strongly hawkish message at its September meeting. The statement removed the language around inflation being partly due to supply shocks. I.e., no more excuses. The SEP showed stronger growth, higher inflation and a lower u-rate across the forecast horizon, despite two hikes this year. And Chair Warsh made it clear in his presser that the job isn't done. He repeatedly emphasized the strength of the economy and noted that the Fed's job is to prevent commodity shocks from broadening out. We remain comfortable with our call for two more 25bp hikes this year, in October and December," BofA notes.

"Overall, the DXY still remains about 1% below levels just ahead of June FOMC.  September's FOMC, along with the recent trend of solid US data better opens the upper side of the dollar's distribution and should quiet calls for a return to the "debasement trade". We generally see the dollar ending the year at/around current levels vs. most G10 currencies," BofA adds.

Sterling may struggle to extend its recovery, having bounced from a session low near 1.3350 after the widely expected 6-3 BoE MPC vote to hold bank rate steady, the bid emerging as traders looking further out the short-term curve infer the U.S. and UK will travel similar monetary policy paths into Q4 and 2027.

Though cable appears to be stabilizing, headwinds persist. Near-term, the UK autumn budget due in October is a threat, with PM Andy Burnham needing to navigate a tenuous fiscal position to placate bond vigilantes. To that end, the BoE said long-dated gilts in its Asset Purchase Facility will be replaced as they mature and APF gilt sales paused until April 2027 — ostensibly to soothe fiscal nerves as UK 10- and 30-year yields remain elevated.

Today's hold carried hawkish overtones, the BoE flagging the ongoing Middle East conflict and its inflationary drag and forecasting CPI above 4% in early 2027 — paving the way for hikes. LSEG's IRPR implies roughly 36bp of BoE tightening by the December 2026 meeting and up to 87bp by December 2027, a trajectory close to the Fed's, which may stall further sterling declines.

The geopolitical tensions in the Middle East are expected to impact most developed economies similarly, keeping oil prices and inflation elevated. For the UK, fiscal risk now takes the spotlight: if the budget disappoints and UK yields outrun U.S. Treasuries, GBP/USD likely resumes lower, with the July 28 low at 1.3274 and June 24 low at 1.3140 as downside targets.
GBP$ Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research updates its Fed rates call after yesterday's September FOMC meeting,

"We now expect the FOMC to deliver a second 25bp hike in October, a change from our previous expectation that September would be the only hike. We think October is the most likely time for the next move because it is most natural to deliver hikes that the FOMC presented today as supporting “a timelier return" to the 2% target at consecutive meetings," GS notes.

"We have kept our forecast for the terminal rate unchanged at 3.25-3.5% by adding to the September and December 2027 rate cuts we already expected at third 25bp cut in March 2028. Additional hikes are possible but not our base case," GS adds.

Credit Agricole CIB Research reviews the September FOMC decision.

"The Fed delivered an expected hike at the September FOMC, raising the target range by 25bp to 3.75%-4.00% for its first hike since July 2023. On top of the hike itself, we would characterize the other aspects of the meeting as having a hawkish lean, helping to ease some credibility concerns that had been percolating in the background, with long-end rates relatively contained, if not slightly lower, after the decision," CACIB notes.

"Taking everything together, we think it is unlikely that September’s hike will be a one-and-done, with the Fed likely to deliver additional tightening in the meetings to come. For now, we would lean towards a total of 75bp to remove the insurance cuts delivered late last year," CACIB adds.

• 0.7084-0.7121 traded overnight, AUD/USD opened NY near 0.7110, up +0.32%

• Better risk sentiment buoyed AUD/USD with help from USD, US yield drops

• Rallies in gold, silver, copper & equities along with USD/CNH drop added buoyancy

• AUD/UD rallied back above the 38.2% Fib of 0.6867-0.7238 & daily RSI turned up

• Monthly RSI, monthly inverted hammer candle are concerns for AUD/USD bulls

• US jobless claims, Sep. Philly Fed business index are data risks in NY's morning
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of gold miners gain premarket, tracking rise in bullion prices [GOL/]

• Spot gold up 1.1% at $4,308.39 per ounce after hitting a near-six-week low on Wednesday

• Gold prices climb as a softer U.S. dollar and easing oil prices lend support, while investors assessed the Federal Reserve's latest rate hike and prospects for further policy tightening

• Top miners Newmont , Barrick Gold , up 1.6% and 1.8%, respectively

• South African miners Gold Fields rises 3.4%, Harmony Gold jumps 3.6%, AngloGold Ashanti gains 2.4% and Sibanye-Stillwater up 1.1%

• Canadian miners Agnico Eagle Mines , rises 2.7% and Kinross Gold , adds ~2%

(Reporting by Pooja Menon in Bengaluru)

• USD/CHF broke out to fresh highs after the Fed's hawkish policy decision

• Fed hiked 25bps. Vote was unanimous. Dots pencil at least one more hike this year

• Spot clears the 100-week MA for the first time since March 2025

• A sustained daily close above this level opens path to 0.8350-75 zone

• Former resistance now flips to support at 0.8173-0.8200

• Failed follow-through above 100-week MA would trap longs, raising risk of a pullback
USDCHF weekly chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

FX options are sending a volatility warning signal ahead of Friday's Bank of Japan decision, with volatility protection costs reaching their highest levels this year.

As the much-anticipated BoJ policy announcement approaches, implied volatility in USD/JPY is drawing significant attention. The measure, which gauges expectations for future volatility, can offer clues about potential foreign exchange reactions to major event risks such as central bank policy decisions.

Ahead of Friday's BoJ announcement, implied volatility trends have diverged across major currency pairs. While overnight expiry implied volatility rose broadly before the US Federal Reserve's policy announcement on Wednesday, it has since retreated. USD/JPY is the exception, with overnight expiry implied volatility rising further, reflecting heightened anticipation and uncertainty surrounding the BoJ decision.

Excluding the broader surge in FX options implied volatility during JPY intervention episodes in late July and early September, overnight USD/JPY implied volatility is at its highest level since the Fed's January meeting and the highest for any BoJ meeting in the past year.

Overnight USD/JPY implied volatility currently stands at 21.0, implying a premium, or break-even, of 136 JPY pips in either direction for a vanilla straddle. That compares with implied volatility of around 16.0, or 100 JPY pips, ahead of the recent Fed decision, highlighting a much higher perceived risk for sharp JPY volatility following the BoJ announcement.

The BoJ is expected to raise interest rates to a 31-year high of 1.25% on Friday. However, analysts caution that the widely anticipated move may not provide sufficient support for the JPY unless Governor Kazuo Ueda adopts a hawkish tone on future rate increases.

Intervention remains a risk after USD/JPY edged up to 156.42 following the Fed decision. Japan has since reaffirmed its commitment to orderly JPY moves through close communication with the US, after being questioned about the Fed's hike, which helped USD/JPY recover more of its early September decline from 160.00 to 152.89.

Elevated USD/JPY implied volatility suggests markets are bracing for a significant reaction to news from the BoJ. While a rate hike is widely expected, the key factor for traders may be the tone of Ueda's guidance on the policy path ahead.
Overnight expiry FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)