The data is scary …
As of 7:08 am EST, the NADEX offered the following binary options contracts for the EUR/USD expiring this Friday (23 May 2025) at 3 pm:
Contract closing above 1.1225. Buy at $9.30
Contract closing above 1.1175. Buy at $9.90
Contract closing above 1.1125. Buy at $9.90
I calculated a forward price for EUR/USD for this Friday at $1.1358.
The EUR/USD spot price at 7:08 am was 1.1357.
The European Central Bank short term rate is at 2.171% while the Board of Governors-Federal Reserve System reports a 4-week rate of 4.23%.
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The narrative is just as worrisome …
Uncertainty continues to taint the U.S. economic outlook. Congress is debating a budget that threatens to balloon the federal deficit with some members of the President’s own party at odds with him over the level of spending being proposed.
Reuters yesterday cited analysts seeing a “Sell America” trade back in focus along with room for further depreciation in the US dollar. Market nervousness is being manifested in a diminished appetite for certain US assets along with high deficits.
More concerns about Asian exposure to the US dollar are raised by a flight out of the dollar and a move toward the yen, Swiss franc, and the euro. Reuters pointed out yesterday that China, South Korea, and Singapore have massive exposure to the US dollar and the fiscal concerns I touched on before may be at the heart of the retreat.
The day is young …
Alton Drew
21 May 2025
DISCLAIMER: I am not a financial adviser. These blog posts are for educational purposes only. Trading of any kind involves risk. Your trading decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary.
LEGAL ANALYSIS: For an analysis of the legal or regulatory environment surrounding the events described in this post, contact me at altondrew@altondrew.com to set an appointment.
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Alton Drew
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