The primary question I ask myself when looking at a binary options contract for foreign exchange is, “Why would anyone buy euros using US dollars?” I had that question answered in part by the report on changes in U.S. consumer prices released half an hour ago by the U.S. Bureau of Labor Statistics.
According to the report, consumer prices edged up .1% in May 2025. In April 2025, consumer prices ticked up .2%. For the last twelve months, consumer prices increased 2.4%.
Compare US inflation numbers with inflation seen in Europe. According to the European Central Bank, inflation in the eurozone is already hovering around the Anglo-sphere universal two percent. (The last print I saw was 1.9%). Inflation in 2025 is expected to stay at two percent then decline in 2026 to 1.6% and tick back up to two percent in 2027.
In my 61 years I have never known prices to do anything else but increase so I am growing less impressed as the years go by with the consumer price index. I was more impressed with how every contract betting on a EUR/USD close above 1.1360 at 3 pm disappeared … literally. I bought that bet, the probability of expiration of 1.1360 more assured by the EUR/USD driving to a price of 1.1474 before 9:00 am.
Is the euro a flight to safety by people holding American dollars when shit hits the fan? It would appear so, even though the flagship bond 2-year bond for the eurozone, the German bund, pays a shitty 1.836%. The yield fell from 1.860% around 7:40 am EDT which tells me that American traders among others moved money into Europe.
Anyway, the contract re-adjustment was fun to look at. Will the Federal Open Market Committee make this data an excuse to cut rates? Probably not. I will have to visit the FedWatch tool at the CME to ascertain the trader sentiment.
Alton Drew
11 June 2025
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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.
Alton Drew
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