USD/PHP rose 0.3% to 60.10 after President Ferdinand Marcos Jr. declared a national state of emergency in response to rising energy prices. The Philippine peso is down 2.1% against the US dollar so far in 2026. The emergency order expands executive powers to secure fuel supplies and speed up measures aimed at limiting higher energy costs for consumers and businesses. A national emergency was last declared in 2020 during the COVID-19 pandemic.

Emergency Order Duration And Procurement Plan

The order is set to last one year unless the President extends or suspends it. A committee will be formed to directly procure energy commodities, food, medicine, and other necessities. The Department of Energy has been instructed to tighten oversight of energy prices and target profiteering. The Department of Transport will subsidise fuel and commuter fares, suspend aviation taxes, and extend public transport operating hours. The government has also temporarily introduced a four-day work week to reduce energy use. Authorities indicated less likelihood of using foreign exchange reserves to defend the peso, after describing such action as “futile”. The recent declaration of a state of emergency signals a major policy shift for the Philippine Peso. With authorities now viewing the defence of the currency as “futile,” the primary support for the peso has been removed. We should anticipate that the path of least resistance for USD/PHP is upward in the coming weeks.

Market Implications For The Philippine Peso

This shift comes as the nation’s gross international reserves have already been under pressure, dipping to around $98 billion last month from over $100 billion at the end of 2025. The new emergency powers, which include subsidies and direct commodity procurement, will likely widen the government’s budget deficit beyond the initially projected 5.5% of GDP. This added fiscal strain creates a fundamental headwind for the currency. Given the reduced risk of central bank intervention, we should consider buying USD call options against the PHP. This strategy allows us to position for further peso weakness with a defined risk, targeting a potential move above the 60.50 level. The current environment makes long USD positions more straightforward than they were just a week ago. Looking back to the state of emergency declared in 2020, we saw a similar, sharp increase in currency volatility. We expect implied volatility on USD/PHP options to climb as the market digests the full impact of these new measures. This presents an opportunity not just for directional bets, but also for strategies that benefit from rising market uncertainty. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) rose to about 99.90 and then held steady. Demand for the US Dollar as a safe haven, Middle East tensions involving Iran, and interest rate differences supported the move. US President Donald Trump said the rise in Oil prices and the fall in the stock market linked to Iran tensions were less severe than expected. He said he expected any economic damage to be reversed.

Euro And Pound Weaken

EUR/USD slipped towards 1.1530 after weak Eurozone PMI data and ongoing growth concerns. GBP/USD fell to around 1.3320 as UK growth worries and a firmer US Dollar weighed on the pair. USD/JPY climbed to near 159.80, supported by higher US Treasury yields and policy divergence. Geopolitical risks also supported the Yen at times, limiting the rise. AUD/USD dropped towards a two-month low near 0.6890 due to risk aversion and a firm US Dollar. WTI Oil traded near $94.30 per barrel as Iran-related uncertainty kept a risk premium in prices. Gold fell towards $4,380 as the stronger US Dollar outweighed safe-haven demand. Data due on Friday, March 27 includes UK March Consumer Confidence, UK February Retail Sales, Eurozone March HICP (preliminary), and US March Michigan Consumer Sentiment and Inflation Expectations.

Looking Back To 2025

Looking back to this time in 2025, we remember a market driven by a flight to safety amid tensions in the Middle East. The US Dollar Index was approaching 100 as traders sought refuge in the greenback. This environment punished risk-sensitive currencies and benefited the dollar due to its safe-haven status. That geopolitical risk premium has since faded from the market, which can be seen in energy prices. West Texas Intermediate oil, which traded over $94 a barrel during the 2025 scare, is now trading calmly around $81 as of late March 2026. This suggests derivative plays based on sudden supply shocks are less favorable, and focus should shift to global demand fundamentals. The US Dollar remains strong, with the DXY holding near 103, but the dynamic has changed from safety to interest rate differentials. Last month’s US inflation data, the Consumer Price Index for February 2026, came in at 2.9%, keeping the Federal Reserve cautious about cutting rates. Traders should be pricing options based on a “higher for longer” interest rate scenario rather than last year’s geopolitical panic. A significant shift occurred in the USD/JPY pair, which we saw push toward 160 last year. The Bank of Japan finally ended its negative interest rate policy in early 2026, creating a fundamental change that has capped the yen’s weakness. The pair has since pulled back toward the 151 level, and volatility strategies should now account for a more active Japanese central bank. The Australian Dollar was near a two-month low around 0.6890 this time in 2025 due to broad risk aversion. While it has recovered from those specific lows, it remains under pressure around 0.65 due to persistent concerns over Chinese economic data. We see that trades should be less about global fear and more focused on the specific health of the Asian economy. Gold failed to rally during the 2025 tensions because of the extremely strong dollar, and we noted it fell toward $4,380. Now, with the dollar off its peak and markets anticipating eventual rate cuts, Gold has found support and is currently trading near $4,550. This suggests that call options on gold may be more attractive now than they were during last year’s crisis. Create your live VT Markets account and start trading now.

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EUR/USD fell for a third day on Thursday, trading near 1.1529 and down about 0.26%. The US Dollar stayed supported amid tensions linked to the US-Israel war with Iran. Iran rejected a US 15-point proposal and said any deal must include security guarantees and recognition of its authority over the Strait of Hormuz. The Strait of Hormuz remains effectively closed, adding a risk premium to Oil prices.

Oil Inflation And Rate Expectations

Higher Oil prices are adding to global inflation concerns and may keep interest rates higher for longer. Markets expect the Federal Reserve to hold rates through 2026, with inflation still above its 2% target. The Fed faces downside risks in the labour market while keeping policy restrictive. It is expected to stay data-dependent and watch for weakening employment before making changes. In the Eurozone, inflation is near the 2% target, but higher energy costs may hurt growth and household spending. Market pricing now fully reflects two ECB rate hikes, with April increasingly seen as the first move. Eurozone data has softened this week, with Germany’s GfK Consumer Confidence for April at -28 and the Ifo Business Climate index at 86.4, a 13-month low. PMI data also showed slower business activity.

Trade Strategy And Volatility

Given the sustained strength of the US dollar from geopolitical tensions, the clear trend for us is to favor positions that benefit from a weaker Euro. We should consider strategies that capitalize on further declines in the EUR/USD pair, such as buying put options or shorting futures contracts. The current breakdown below the 1.1550 support level signals that more downside is likely in the coming weeks. This environment of conflict and central bank uncertainty is a recipe for high volatility. We see implied volatility on EUR/USD one-month options has already jumped to over 12%, a sharp increase from the calmer conditions we saw at the end of 2025. This suggests that options strategies designed to profit from large price swings, such as straddles, could be effective, especially around the upcoming April ECB meeting. The widening policy gap between a Federal Reserve on hold and a European Central Bank forced to consider rate hikes is the central theme. With the latest US Core PCE inflation data for February coming in at a stubborn 2.9%, the Fed has no room to ease policy. This policy divergence should continue to weigh heavily on the Euro, making a stronger dollar the path of least resistance. The root cause of this pressure remains the oil markets, where the ongoing closure of the Strait of Hormuz is creating a severe supply shock. We have seen West Texas Intermediate crude prices surge past $125 per barrel, levels that echo the energy crisis of 2022. A direct trade on this driver would be buying call options on oil futures to benefit from further price increases. The economic data from the Eurozone reinforces a bearish view on the single currency. Germany’s recent Ifo Business Climate index falling to a 13-month low of 86.4 shows the economy was already fragile before this energy price shock. The ECB now faces hiking rates into a potential slowdown, which could accelerate economic weakness and add more downward pressure on the Euro. Create your live VT Markets account and start trading now.

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MUFG is maintaining a defensive approach to Asian foreign exchange as the US-Iran conflict continues to add external pressure. Higher US yields and higher oil prices are supporting the US dollar and weighing on Asian currencies. Several Asian currencies have fallen to fresh lows versus the US dollar since the conflict began. THB is down 4.8%, while PHP and KRW are each down 4.1%.

Oil Driven Pressure On Asian Fx

MUFG links the weakness to sensitivity in oil-importing Asian economies to energy costs and risk sentiment. It says broader stability in the region’s currencies would depend on geopolitical de-escalation and lower oil prices or lower US yields. The bank notes rising inflation risks across Asia due to energy prices and possible second-round effects on transport and food costs. It points to high food CPI weights of more than 30% in Thailand, India, Vietnam, and the Philippines. MUFG adds that signs such as a reopening of the Straits of Hormuz or a clearer route towards ending the conflict could prompt a reassessment. It also notes that resilience in CNY is helping to steady the region. We maintain a defensive outlook on Asian currencies because of the ongoing uncertainty from the US-Iran conflict. The situation is keeping external pressures high, supporting the U.S. dollar. This environment makes it prudent to hedge against further weakness in oil-importing Asian economies.

Trading Positioning And Hedges

The impact is clear in the energy and bond markets, with Brent crude futures holding firm near $115 per barrel, according to recent EIA reports. This has helped push the U.S. 10-year Treasury yield to 4.85%, as inflation concerns keep the Federal Reserve from signaling any rate cuts. A strong dollar is the natural result of these higher yields and safe-haven demand. Currencies highly sensitive to oil prices have been hit hard since the conflict escalated in late 2025. The Korean Won is trading near 1450 against the dollar, a level not seen consistently since the 2008 financial crisis. Similarly, the Thai Baht and Philippine Peso are down over 4% since the year began, reflecting their vulnerability. For traders, this suggests positioning for continued strength in the U.S. dollar against these currencies. Buying USD call options against a basket of KRW, THB, and PHP offers a way to profit from further downside with a defined risk. This strategy aligns with the view that external pressures will remain the dominant driver in the coming weeks. Inflation data from the region confirms these risks, with the latest Philippine Statistics Authority report showing March inflation accelerating to 5.2% year-over-year. This price pressure, driven by energy and food costs, limits the ability of Asian central banks to support their economies with monetary easing. This creates a difficult backdrop for their respective currencies. Given the elevated tension around the Strait of Hormuz, maintaining long positions in oil derivatives is a logical hedge. Call options on WTI or Brent can provide upside exposure if energy flows are further disrupted. The pattern of energy shocks leading to global economic slowdowns, similar to what we saw in the 1970s, is a historical risk worth considering. The Chinese Yuan remains a relative anchor of stability in the region. One potential strategy is a pair trade, such as going long the offshore Yuan (CNH) against the Korean Won (KRW). This position isolates the Yuan’s managed resilience from the Won’s greater sensitivity to global risk sentiment and energy prices. We will continue to monitor any signs of credible de-escalation, as this would be the primary catalyst to change our defensive stance. Until there is a clear normalization of energy transit or a diplomatic breakthrough, the path of least resistance for these vulnerable Asian currencies is likely lower. Create your live VT Markets account and start trading now.

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Alan Taylor, an external member of the Bank of England’s Monetary Policy Committee, said there is a high bar for raising interest rates. He spoke at a conference in New York hosted by Exante Data. He said the current energy shock looks more like 2011 than 2022 in magnitude. He said holding policy steady is preferable until the effects of the shock are clearer.

Inflation Expectations And Labour Market Signals

He said the UK faces low risks of inflation expectations becoming unanchored. He linked this to a weakening labour market and slowing wage growth. He said that if disruptions persist and the shock grows, the committee may face a tougher choice between higher inflation and weaker growth. He said that if the shock is mild or short-lived, it could allow for more rate cuts once risks diminish. Given the high bar for raising interest rates, we should position for UK rates to remain steady or fall in the coming months. This view from a key policymaker suggests the market might be too aggressive in pricing future hikes. Derivative strategies should now favour a dovish Bank of England. The comparison of the current energy shock to 2011, rather than the extreme price spike of 2022, is telling. In 2011, Brent crude saw a temporary spike due to the Libyan crisis, which the BoE looked through without hiking rates aggressively. This historical context reinforces the idea that the committee will tolerate a short-term inflation bump to support growth.

Trading And Hedging Implications For UK Markets

This patient stance is justified by a weakening domestic economy. Recent data shows UK wage growth has slowed to 3.5% and the unemployment rate has edged up to 4.5% in February 2026. With these core inflationary pressures fading, the case for holding policy steady becomes much stronger. For interest rate traders, this suggests the Sterling Overnight Index Average (SONIA) forward curve is likely mispriced. We should consider entering positions that benefit from lower rates later in the year, such as receiving fixed in interest rate swaps or buying futures contracts for late 2026. The commentary implies that if the energy situation calms, rate cuts could be on the table sooner than anticipated. In the foreign exchange market, this outlook makes the Pound Sterling look vulnerable. A dovish BoE, especially when other central banks may be more hawkish, typically weighs on a currency. We should consider buying put options on GBP/USD to hedge against or profit from a potential decline in the pound. There is a risk, however, if the energy shock unexpectedly grows, which would create a sharp policy reversal and a spike in volatility. This means that while our primary strategy should be positioned for lower rates, holding some long-dated, low-cost options that would profit from a surge in volatility could be a prudent hedge. This protects against the tougher choice between high inflation and weaker growth mentioned. Create your live VT Markets account and start trading now.

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NZD/USD fell for a third day, trading near 0.5770 and down 0.65% on Thursday. It has dropped since failing to hold near 0.5900 reached last week. Risk appetite weakened as Iran–US tensions increased, lifting demand for the safe-haven US Dollar. Iran rejected a 15-point US proposal and said talks are not under way while military operations continue.

Escalating Geopolitical Risk

US President Donald Trump called for more serious talks and warned of stronger military action. Reports also referenced Israeli strikes in Iran, plus further missile and drone attacks. Tehran has set out demands including security guarantees, financial compensation, and control over the Strait of Hormuz. These conditions add hurdles to a near-term resolution. HSBC expects the New Zealand Dollar to stay under pressure in coming weeks. It forecasts the Reserve Bank of New Zealand will hold at 2.25% at its 8 April meeting. Higher energy prices are supporting local yields, but a hawkish surprise would be needed to change the trend. New Zealand data are limited, with the Roy Morgan Consumer Confidence survey due later.

Options Positioning For Volatility

In the US, speeches from Federal Reserve officials on Thursday and Friday may add volatility. Geopolitical developments remain the main driver. We are seeing a familiar pattern in the NZD/USD, which is under pressure as global risk appetite fades. This situation is reminiscent of a period in 2025 when tensions between the US and Iran drove a similar flight to safety. Today, the driver is broader economic uncertainty, but the outcome for risk-sensitive currencies is much the same. The demand for the US Dollar is evident, with the Dollar Index (DXY) climbing nearly 2% over the past month to trade above 105.00. This corresponds with a notable increase in market anxiety, as the CBOE Volatility Index (VIX) has risen from lows near 13 to above 16 in just the last few weeks. Such an environment makes it difficult for currencies like the New Zealand Dollar to find support. Given this bearish outlook for NZD/USD, purchasing put options is a strategy to consider for the coming weeks. This approach allows traders to profit from a potential continued decline in the pair while capping the maximum loss at the cost of the option premium. Strike prices below the 0.5700 level may offer value if the current risk-off sentiment persists. We also recall that back in 2025, even the prospect of a hawkish Reserve Bank of New Zealand was not enough to halt the Kiwi’s slide against a strengthening dollar. Today, with the RBNZ having held its cash rate at a restrictive 5.5% for many months, there is little scope for a hawkish surprise to support the currency. The market has already priced in a high-for-longer rate environment from the central bank. The elevated uncertainty also suggests that implied volatility may continue to rise. Traders who anticipate sharp price swings in either direction could explore options strategies that profit from increased movement, not just direction. This is especially relevant as key inflation data is due from the United States next week, which could easily inject another bout of volatility into currency markets. Create your live VT Markets account and start trading now.

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Standard Chartered analysts Bader Al Sarraf and Razia Khan examine how the Middle East escalation could affect Gulf Cooperation Council (GCC) economies. They focus on risks linked to the Strait of Hormuz and wider Gulf energy infrastructure. The assessment looks at three transmission channels: fiscal outcomes, non-oil growth, and sovereign buffers. It expects the overall economic impact to be contained, but uneven across GCC states.

Exposure And Export Flexibility

Differences are linked to exposure to export disruption, the ability to bypass the Strait of Hormuz, and the structure of non-oil sectors. Economies with more export flexibility and alternative routes are expected to absorb disruption more easily. GCC public finances start from a relatively strong position, supported by large sovereign balance sheets in many countries. Sovereign wealth assets and foreign exchange reserves exceed USD 6.5tn, providing a buffer against domestic and external shocks. Saudi Arabia, the UAE and Oman are identified as having greater export flexibility and bypass options. Countries that rely more on the strait and have constrained trade routes are expected to face a larger impact. With Middle East tensions now entering their fourth week, we are seeing significant price action directly linked to risks around the Strait of Hormuz. Brent crude has surged over 25% in the last month, touching $112 per barrel as markets price in potential supply disruptions. This level of uncertainty suggests traders should consider long volatility strategies through options on major oil benchmarks.

Volatility And Relative Value Trades

Implied volatility in the crude markets has reached its highest point since the energy market dislocations of early 2024, indicating that options are pricing in larger-than-usual price swings. Rather than simply betting on direction, purchasing straddles or strangles could prove effective, profiting from a large price move whether it goes up or down. These strategies are a direct play on the ongoing geopolitical instability. We also see a clear divergence opening up between Gulf economies, which creates opportunities for pairs trading. Saudi Arabia’s ability to bypass the strait via its East-West pipeline makes its market more resilient compared to others more reliant on the waterway. This is reflected in recent performance, with the Saudi Tadawul index down only 4% this month while Dubai’s market has fallen over 9%. A potential trade based on this is to go long Saudi equity index futures while simultaneously shorting futures on a more exposed market. This strategy isolates the specific Hormuz risk, hedging against a general market downturn while profiting from the relative outperformance of the more resilient economy. The massive sovereign wealth buffers exceeding $6.5 trillion should, however, prevent a systemic collapse, putting a theoretical floor on market downside. This situation contrasts sharply with the relative calm we saw through most of 2025, where oil traded in a predictable range. The current environment demands a focus on assets with clear exposure to the conflict’s divergent outcomes. We believe using defined-risk option spreads is prudent, as it allows for capitalizing on the heightened volatility while capping potential losses if tensions were to suddenly de-escalate. Create your live VT Markets account and start trading now.

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US shares fell on Thursday, with the Dow down about 230 points (0.5%), the S&P 500 down 0.8%, and the Nasdaq Composite down 1.1%. Dow futures moved from about 46,200 to roughly 46,800 before slipping back towards early-session levels. Overnight, Asian markets dropped after Iran rejected a US 15-point ceasefire proposal and floated a counterproposal tied to halting strikes and control of the Strait of Hormuz. South Korea’s Kospi fell more than 3%, while China’s Shanghai index and Hong Kong’s Hang Seng each fell about 1%.

Global Markets React To Rising Tensions

European markets also weakened, with the Stoxx 600 about 0.8% lower as Brent crude rose above $106. Later, reports included a five-day US pause on strikes nearing expiry in 48 hours and the reported killing of the IRGC Navy commander. Gulf states issued a joint statement condemning Iran-linked strikes from Iraqi territory, and two people were killed in Abu Dhabi after debris fell from an intercepted ballistic missile. Brent rose about 5% to above $107 and WTI rose more than 4% to near $95, while the 10-year yield neared 4.4% and 20- and 30-year yields approached 5%. Tech shares fell after Google Research detailed TurboQuant, said to cut memory needs by up to six times with zero accuracy loss; Samsung fell 5% and SK Hynix 6%, while Lam Research and Applied Materials fell about 4%. Initial jobless claims rose to 210K from 205K, continuing claims fell 32K to 1.82 million, and the Fed held rates at 3.50%–3.75% with one 2026 cut projected; CME FedWatch shows an 89% chance of no change through June. With President Donald Trump’s deadline approaching, we are treating the risk of escalating conflict with Iran as the market’s primary driver. We are buying protection against a sharp downturn, as the CBOE Volatility Index (VIX) is likely underpricing the risk of a full-blown conflict in the Strait of Hormuz. Historical precedent from past Mideast crises, such as the 1990 Gulf War buildup which saw the VIX more than double, suggests volatility could spike aggressively from here. The surge in Brent crude to over $107 a barrel is a direct result of the blockade, but the real risk is a complete supply interruption. The U.S. Energy Information Administration has consistently reported that the Strait of Hormuz handles over 20% of global oil transit, so a prolonged closure could send prices significantly higher. We are therefore holding long positions through call options on WTI and Brent futures to capitalize on this upside risk.

Portfolio Hedging And Rates Pressure

This combination of geopolitical tension and higher oil prices creates a clear headwind for broad equity indices. We are hedging our long-term portfolios by buying put options on the S&P 500 and shorting Dow Jones futures. This defensive stance is necessary until we see a credible diplomatic resolution, as sustained high energy costs will eat into corporate profits and consumer spending. In the technology sector, the sell-off in memory chip makers like Micron and Samsung is a structural shift, not just a temporary reaction. We see Alphabet’s AI memory breakthrough as a genuine threat to long-term demand, and we are initiating short positions on key semiconductor ETFs. This sets up a classic pairs trade, allowing us to go long on the innovator, Alphabet, while betting against the companies being disrupted. Finally, we cannot ignore the Federal Reserve’s hawkish stance, which provides a challenging backdrop for the market. With jobless claims remaining low at 210,000 and the CME FedWatch tool showing an 89% probability of rates holding steady through June, there is no monetary policy cushion for stocks. The spike in the 10-year Treasury yield toward 4.4% reinforces the pressure on equities, especially long-duration growth names. Create your live VT Markets account and start trading now.

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The United States held a 7-year note auction where the yield rose to 4.255%. The previous auction yield was 3.79%. This change shows borrowing costs for this maturity moved higher compared with the prior sale. The figures reported were 4.255% and 3.79%.

Market Inflation And Debt Supply Concerns

This poor 7-year auction, with yields jumping to 4.255%, points to serious market concerns about inflation and future government debt supply. We see this as a signal that the market is demanding higher compensation for holding longer-term U.S. debt. This is not happening in a vacuum, as the most recent Nonfarm Payrolls data showed unexpected strength, adding over 250,000 jobs and fueling fears the Federal Reserve will stay hawkish. We are adjusting by increasing short positions in Treasury futures, as higher yields mean lower bond prices. We recall the sharp bond market sell-off in the fall of 2025, which began with similar signs of weak auction demand. Consequently, positioning for a further rise in interest rate volatility by purchasing options on the MOVE Index seems prudent. For equity derivatives, this environment is negative for growth stocks that are sensitive to interest rates. We are buying put options on the Nasdaq 100 ETF to hedge against a potential downturn in the tech sector. This strategy is based on the historical correlation we observed in 2025, where a 50-basis-point rise in the 10-year yield corresponded with a roughly 5-7% drop in the Nasdaq.

Dollar Strength And Forex Positioning

Higher U.S. interest rates also tend to strengthen the dollar as foreign capital seeks better returns. We anticipate the U.S. Dollar Index (DXY), currently trading around 105.50, to test its recent highs. Therefore, we are adding to long U.S. dollar positions against currencies with more dovish central banks, like the Euro and the Yen. Create your live VT Markets account and start trading now.

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USD/CHF rose on Thursday as the US Dollar strengthened amid rising Middle East tensions. The Swiss Franc lagged, with traders wary of possible Swiss National Bank action to limit currency gains. The pair was trading near 0.7941 at the time of writing, up for a third day. It rebounded from the 2 March low around 0.7674 and broke above resistance near 0.7800.

Technical Levels And Moving Averages

That 0.7800 area sits close to the 50-day Simple Moving Average at 0.7794. USD/CHF also moved above the 100-day SMA at 0.7890 and is now testing the 200-day SMA at 0.7946. A sustained move above 0.7946 could push the pair towards 0.8000, then 0.8050. The Relative Strength Index is 62, above the midline. The MACD line remains above the signal line in positive territory, with a modest histogram. Support is seen at the 100-day SMA and then the 0.7800 breakout zone. Around this time in 2025, we saw the USD/CHF pair building a bullish case as it tested its 200-day moving average near 0.7946. The move was driven by a strong US Dollar and concerns that the Swiss National Bank (SNB) would intervene to weaken the franc. That breakout proved to be a critical turning point for the pair’s direction over the last year. Fast forward to today, March 26, 2026, and the fundamental picture has become even clearer, solidifying that uptrend. The SNB has followed through on its dovish stance, having cut its key interest rate to 1.25%, with Swiss inflation now sitting at a low 1.3%. Meanwhile, the US Federal Reserve remains on hold as recent data showed American inflation is proving sticky at 3.2%, keeping the policy divergence between the two central banks wide.

Options Strategies For Derivative Traders

This interest rate difference makes holding US Dollars more profitable than Swiss Francs, fueling steady demand for the pair. The continued geopolitical uncertainty in the Red Sea has also primarily benefited the US Dollar as the preferred safe-haven asset over the Franc. The market’s focus has clearly shifted from fearing SNB intervention to actively trading the reality of its dovish policy. Given the pair is now trading substantially higher, around 0.9180, the bullish momentum we saw starting last year is still intact. The 0.8000 level, a mere target in March 2025, is now a distant long-term support level. The current trend suggests that any dips are likely buying opportunities rather than reversals. For derivative traders, this environment favors strategies that capitalize on continued, albeit potentially slower, upside. Buying call options with strike prices at 0.9250 or 0.9300 for May 2026 expiry allows for participation in further gains while strictly defining risk. This is a direct play on the persistent strength of the US economic and interest rate position over Switzerland’s. Alternatively, for those looking to hedge or position for a short-term pullback, buying put options below a key technical level like the 50-day moving average at 0.9110 could be prudent. A surprise shift in Fed guidance or a sudden de-escalation of global tensions could trigger a sharp correction. This strategy provides a protective floor against the long-standing rally showing signs of fatigue. Create your live VT Markets account and start trading now.

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