Back on 7 July, the EUR/USD spot price was at 1.17802 around 8:09 am. I had determined a forward rate of 1.1775 for 9 July 2025. At 7:02 am, the EUR/USD was at 1.17029 and I recalculated the forward rate for this Friday at 1.1701.
The spot price is the price in the marketplace at which a currency can be bought or sold for immediate delivery.
A forward price is a predetermined delivery price for a currency decided by the buyer and seller of a forward contract to be paid at a pre-determined price in the future.
Am I seeing dollar strengthening and if so, why?
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All the consternation surrounding President Trump’s tariff policies has led in part to a weakening of the euro against the dollar. A weakening euro means that there is less demand for the currency. The price of the dollar when priced in euros sees a decline. In other words, it would take more euros to buy a dollar.
On the NADEX, I decided to buy an events contract with a ten-dollar payout if the EUR/USD exceeds 1.1660 by 11:00 am today. I also bought a EUR/USD events contract expiring on Friday with a payout of ten dollars if the EUR/USD price exceeds 1.1625.
A main narrative event that may cause some movement in short-term interest rates is the release of the Federal Open Market Committee’s meeting back in June. Traders hope to get a sense for why the FOMC held the range for the federal funds rate at 4.25% to 4.50% and whether the FOMC’s sentiment will leak into its rate decision making later this month.
The federal funds rate is the overnight rate at which banks lend each other their excess reserves held either with a federal reserve bank or in their own vaults.
The minutes should be released today at 2:00 pm EDT.
Alton Drew
9 July 2025
LEGAL ANALYSIS: If you are in need of a legal analysis of the events discussed in this post, reach out to me at altondrew@altondrew.com to make an appointment for a consultation.
DISCLAIMER: I am not a financial advisor. This post is provided for educational purposes only. Trading involves risk. Your trading decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary.
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