• USD call options have been very popular to hedge positions for ongoing Mid-East conflict

• USD calls charge a premium for the right to buy USD if strike is preferable to spot price

• These options have been especially popular versus EUR - strikes as low as 1.1000

• Expiries fixed over coming months would hedge risk of more USD gains if conflict drags on

• USD calls vs JPY with strikes above 160.00 saw a strong pick-up in demand last week

• Price action suggests the expected level of official intervention is now higher

• Related - RBA threat boosts AUD/USD's volatility risk premium to 11-month high (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 40 pip range thus far Monday; 1.3226-1.3266

• 1.3226 is six pips above Friday's 14-week low of 1.3220

• Drop to 1.3220 spurred by demand for safe-haven dollar, higher oil prices

• Oil above $100. UK PM vows to protect "working people" from Iran war fallout

• BoE is expected to keep its policy rate at 3.75% this week (Thursday)

• CFTC data: Net GBP short up for fifth consecutive week, to 84,197 contracts

GBPUSD


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

• Many central bank policy announcements due this week but RBA the only one expected to hike

• Overnight options expire 10-am New York on Tuesday and now therefore include the RBA call

• Overnight implied volatility shows a substantial increase for AUD/USD - priced well above G10 peers

• Overnight expiry AUD/USD implied vol peaked 25.0 in Asia from already high average 18.0 last week

• Premium/break-even at 25.0 is 72 USD pips vs 56 USD pips at 18.0

• Current level of o/n expiry AUD/USD implied vol is highest since Trumps April 2025 liberation day

• Friday's FX options wrap - Bracing for shocks as USD call demand surges
Overnight expiry FXO implied volatility


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

• Number of euro longs reduced from $27 billion in Feb to $15 billion in March

• EUR/USD has sunk from 1.2084 to 1.1509 EBS while longs pared

• Target to correct 2025-2026 uptrend is 1.1336 (38.2%)

• Eventually those betting on a rise (long euro) must sell

• The correction heightens chance that traders further reduce long positions

•
EURUSD and betting


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• USD/JPY held relatively bid in Asia on 159, range 159.26-72 EBS

• Off some early on FX intervention threat over the weekend, today

• That said, USD remained strong across board along with high crude oil prices

• Crude oil prices relatively high, NYMEX futures @100/brl, Brent even higher

• Resistance at 159.75 high Friday, then 160.00

• $1 bln in option expiries today between 159.95-160.00 to help cap

• Spot highest since 161.76 July 11, '24 before fall to 139.58 Sept 16, 2024

• 161.96 peak on July 3, 2024 earlier in month

• EUR/JPY 182.25-70 EBS after fall to 182.29 Friday

• Just above ascending 100-DMA at 182.20, daily cloud 183.50-184.30 above

• Some option expiries today at 182.25, 181.00-05, 180.00

• GBP/JPY 210.82-211.56, back in 210.06-212.38 daily Ichimoku cloud

• Follows brief sojourn back above cloud last week, 211.41 100-HMA pivot

• AUD/JPY 111.46-90, pivoting around 111.74 hourly tenkan, daily kijun 111.93

• On heavy side despite expectations of RBA hike tomorrow, more going forward

• Related comment , also

• On FX action threat , ,
USD/JPY hourly:


NYMEX crude oil futures - hourly:

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

• GBP/USD up +0.2% in Asia as crude slips below $100, Wall Street futures rise

• WTI +0.15%, pares early gains of 3%; S&P E-Mini ekes out a 0.4% gain

• U.S. in talks with other countries to protect Strait of Hormuz, Trump says

• Trump threatens NATO with a "very bad" future if the bloc does not help U.S.

• GBP upside capped as conflict escalates; Iran asserts strength, shuns talks

• UK economy ground to halt even before Iran war; stagflation fears mount

• BoE rate decision on Thu, monetary policy report and summary key

• Unemployment data also due; Fed rate decision on Wed key for markets

• Support 1.3210-20, 1.3180, resistance 1.3290-1.3300, 1.3340-50

• Fridy range 1.3220-1.3368; Asia range 1.3226-1.3266
GBP:

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

• AUD/USD +0.4% Mon, broader USD index eases 0.3% as sentiment steadies

• U.S. officials predicting quick end to war even as Iran rejects any talks

• Oil the main focus with global inflation fears rising, bonds under pressure

• RBA meeting outcome Tue, 25 bps hike anticipated, statement will be critical

• FOMC meeting outcome Wed, expected to leave FFR unchanged at 3.50-3.75%

• AUD recovering from lower hourly Bollinger band, solid buying 0.6945-50 zone

• Range Asia 0.6985-0.70185, support 0.6944 0.6900, resistance 0.7282 0.7661
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• USD stronger across board on continuing Middle East war, no end in sight

• NATO allies look to become more involved, escalation inevitable?

• Japanese and South Korean officials agree to act on FX but to no avail?

• USD/JPY to 159.75 EBS Friday, Asia so far today 159.26-72

• Highest since 161.76 on July 11 2024 before fall to 139.58 Sept 16, '24

• 161.96 peak on July 3, 2024 earlier in month

• Japan FX intervention threat real but Middle East conflict effects rule

• Tech support from flat hourly Ichimoku kijun at 159.38, bids below?

• Ascending hourly Ichimoku cloud 158.65-159.11 below

• Large $772 mln option expiries today between 158.25-50, some 159.00-05

• Also some at 159.50, total $1 bln above between 159.95-160.00, to help cap?

• Short JGB-US Treasury rate differentials wider, USD supportive, 2s @245 bps

• Related comments , , , also

• US markets , , ,

• On Japan-SoKorea , , ,

• On US economy , , on Japan energy needs

• On Middle East , , ,
USD/JPY:


JGB-US Treasury 2-year interest rate differential:


NYMEX crude oil futures:

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

• Australian gold stocks fall as much as 4.2% to their lowest level since mid-December 2025

• Sub-index on track to record its third consecutive day of losses, if trend holds

• Gold prices slipped on Friday pressured by inflation worries driven by the Iran war [GOL/]

• Gold miner Northern Star Resources and Genesis Minerals lose over 5.5%

• Sub-index has fallen 9.1% this year, including session's moves

(Reporting by Roshan Thomas in Bengaluru)

• AUD/USD +0.2% from Fri 0.6980 low, as DXY drifts off a 4-month 100.54 high

• RBA meeting outcome Tue, 25 bps hike expected, tone & guidance crucial

• U.S. strikes Iran's key oil export hub Kharg Island, ceasefire elusive

• Oil the main focus with global inflation fears rising, bonds under pressure

• FOMC meeting outcome Wed, Reuters poll consensus no change to FFR

• Deteriorating risk sentiment weighing on AUD, solid buying 0.6945-50 zone

• Range Asia 0.6985-99, support 0.6944 0.6900, resistance 0.7282 0.7661
AUD Daily 200-DMA & DXY Daily 55-DMA

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

• NY opened near 1.1460 after pair hit a 7-month low of 1.1433 in Europe's morning

• Pair lifted early as US$ traded softly, 1.1490 traded but the pair turned lower again

• Broad-based US$ buying emerged again; USD/CNH rallied toward 6.9060

• Oil gains weighed on the pair as did drops in gold

& equities

• EUR/USD dipped back below 1.1440, traded down -0.61% in NY's afternoon

• Falling RSIs, pair's hold below 10-DMA, 12-month MA are bearish tech signals
eurusd


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

• GBP$ nears session low in NY afternoon, -0.7% at 1.3249; NorAm range 1.3289-1.3231

• Mideast tensions, weak UK data weigh on GBP$; US-Iran tensions remain primary focus

• USD also gaining as Fed rate cut expectations for 2026 diminish, 1-cut seen in Sept

• BoE expectations flip to 1-hike late in 2026 amid persistent inflation

• UK 10-yr gilt yield at 4.83%, highest since early-Sept, fiscal angst a drag on GBP/USD

• GBP$ supt 1.3231 Friday's 3-mos low, 1.3200 psychological lvl, 1.3180 daily low Dec 2

• Res 1.3261 falling 10-HMA, 1.3368 daily high Mar 13, 1.339 the flat 100-DMA

GBP Chart:


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

(Corrects headline to Four session low struck)

• NY opened near 0.7040 after the pair fell overnight, 0.7062 hit early on US$ weakness

• US$ bulls remerged however as risk soured, AUD/USD began falling again

• Oil gained & USD/CNH rallied toward 6.9060 while gold, silver & stocks traded downward

• AUD/USD hit 0.6999 and held nearby late, it traded down -1.03% in NY's afternoon

• Techs are bearish; AUD/USD trades below the falling 10- & 21-DMAs, daily RSI falling

• Monthly RSI also falling after diverging on the 3-3/4-year high struck on Wednesday
audusd


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

Credit Agricole CIB Research previews next week's RBA March policy meeting.

"The RBA meeting next week should be a positive for the AUD. The meeting outcome is expected be a close call, but we think the RBA will raise its cash rate 25bp to 4.10%. We had previously thought the central bank could hold off raising rates until May," CACIB notes.

"With the market about 75% priced for a hike, the knee-jerk reaction in the AUD to a hike would be higher, but then investors will look to the vote count (we would not be surprised to see a split vote) as well as the RBA’s rhetoric. While a spilt vote would weigh on the currency, we think the RBA’s rhetoric will be hawkish with an eye on containing inflation expectations. This would give the AUD another lift as markets price in further rate hikes," CACIB adds.

• Cable drops to 1.3231 as safe-haven dollar catches fresh bid

• 1.3231 is the lowest level since early December (1.3212 was Dec 3 low)

• Asian session low was 1.3315 - before UK GDP data miss hurt pound

• CFTC data on FX positioning is due at 3.30pm ET (1930 GMT)

• Data is likely to show net GBP short rose again in the week to March 10

• Barclays expects Fed to push back rate cuts on inflation worries

GBPUSD


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

Bank of America Global Research outlines the latest findings from its FX and Rates Sentiment Surve.

"USD positioning swung rapidly from a record underweight a month ago to neutral levels, with investors viewing traditional "risk off" as the biggest upside risk from here. In contrast, duration exposure/views have been more stable following the Middle East conflict, with the pain likely concentrated in the front-end," BofA notes.

"There is low conviction in volatile markets but for choice, investors prefer to chase the momentum in USD but fade the back-up in rates. This is consistent with our view that global recession risk from persistently high energy prices may be underpriced," BofA adds.

Sterling faces a challenging near-term outlook, with risks skewed toward further downside as a toxic combination of stagnating growth and persistent inflation weighs on investor sentiment.

Sterling fell to a three-month low of $1.3245 on Friday following data showing the UK economy stagnated unexpectedly in January. This weak activity, coupled with stubbornly high inflation expectations, has fueled stagflation fears just as geopolitical tensions in the Middle East drive energy prices higher—a dual blow that acts as both a tax on growth and a catalyst for price pressures. Market participants are increasingly adding to short positions as the currency’s yield advantage evaporates. Rising fiscal concerns have pushed 10-year gilt yields toward last summer’s highs by 4.8%, while shifting STIR expectations, as indicated by LSEG's IRPR, now indicate a potential Bank of England hike by the end of 2026, a stark reversal of earlier expectations of as much as 2-25bp cuts into yearend 2026. Simultaneously, Fed rate cut expectations have been scaled back to a single 25-basis-point move in September, further squeezing the pound.

From a technical standpoint, the outlook is increasingly bearish as GBP/USD moves farther below its 200-DMA at 1.3441 and has pierced the lower daily Bolli at 1.3277. Immediate support is found at today's low of 1.3245, and a sustained break below this level could signal a deeper retracement toward late-2025 ranges near 1.30.

On the topside, any relief rallies will likely find stiff resistance in the 1.3363/68 area, the daily conversion line and Friday high. Further up, the 100-DMA at 1.3399 and recently bruised 200-DMA serve as formidable ceilings that the pair must reclaim to neutralize the current negative momentum.
Sterling Chart:


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

Goldman Sachs Research previews next week's RBA March policy meeting.

"We now expect the RBA to raise the cash rate 25bp at its March meeting to 4.10% (GS prior: +25bp in May), a risk we have been highlighting as a 30-40% probability since the strikingly hawkish pivot in the RBA’s reaction function in February,:" GS notes.,

A March hike is far from a done deal, but several recent developments suggest it is now the most likely scenario (GS: 60% subjective probability)," GS adds.

ANZ Research previews next week's RBA March policy meeting and discusses its AUD/USD strategy around the meeting.

"We now expect the RBA to raise the cash rate by 25bp next week, followed by an additional 25bp in May. In this scenario, we would likely see a rally in the AUD/USD, pushing it to test recent highs around 0.72 following the meeting. This remains our base case," ANZ notes.

"That said, in the event of a hold we are unlikely to see lasting weakness in the AUD/USD given the recent strength of domestic data and resilience of the AUD against falling risk sentiment.

We view any post meeting declines as short-lived, with key support at 0.70. Any tactical decline may be an opportunity to enter fresh long positions. We remain optimistic on the AUD over the medium term and have revised our forecasts higher, now expecting AUD/USD to be at 0.75 by year end," ANZ adds.

• EUR/GBP finding a base ahead of key support at 0.8590-0.8610

• Dip lurking around key support zone as flagged

• Typical Friday dynamics in play - weekend geo gap risk hedging dominates

• USD bid, oil drifts higher and risk sentiment is softer

• Both EUR and GBP carry headline risk, so cross is unlikely to break out of existing ranges

• Current backdrop does not give a clear reason to favour either leg

• Range has been well-defined since July 2025 (0.8600/0.8850)

• Near-term resistance sits at 0.8687-0.8700 (200DMA), then above at 0.8750
EURGBP daily chart


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

• Dollar on track for second weekly rise; euro, yen at multi-month lows

• USD/JPY hit 159.69 on Friday, the highest since Japan's July 2024 intervention, according to EBS

• Surge in FX option bets shows USD/JPY intervention line has shifted

• While lasting impact is debatable, a new round of intervention could trigger a sharp USD/JPY decline

• Direct intervention would likely see the early Oct 2025 gap between 147.45 and 149.02 filled

• BOJ may consider a rate hike if yen pressure persists

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Correlation Chart


Daily Chart


Correlation Chart


Correlation Chart


Daily Chart


Daily Chart


Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Global economic concerns now driving renewed risk aversion - boosting USD and FX option prices

• FX option implied volatility surges back toward Monday's highs - seen after initial oil spike above 100

• AUD/USD implied volatility has seen a more pronounced increase than its G10 FX peers

• 1-3-month expiries have already fully retraced the setbacks from Mondays highs at 12.2 and 11.2

• Current levels are highest since Trumps liberation day spike to extremes in April 2025

• Related - USD call options are paying dividends - a worthy hedge
AUD/USD FXO implied volatility


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

• Cable extends south to 1.3286 on January's unexpectedly flat UK GDP print

• Growth of 0.2% was expected. 1.3286 is the lowest level since Monday

• 1.3283 was low on Monday - when the dollar jumped on soaring oil prices

• Goldman hikes average Brent oil forecast to over $100 a barrel for March

• GBP/USD bear targets include 1.3255 (3-month low on March 3) and 1.3200

• 1.3315 (pre-GDP data low) and 1.3339 (Thursday low) are now resistance levels

GBPUSD


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

• EUR/USD drops to a six-month low at 1.1467 EBS (Nov 2025 low 1.1469)

• Decisive break below 1.1540 targets a return to Aug 2025 low at 1.1392

• Selling follows bearish signal on Mar 8 where 21-DMA fell below 55-DMA

• Traders likely to pare more of their $20 billion bullish wagers

• War adds to already significant risk of EUR/USD drop

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)