US economic data disappoints, traders betting on the Australian dollar and euro to rise against the US dollar.

Amid recent poor economic data in the United States, options traders are betting on currencies like the Australian dollar and the Euro to rise against the US dollar. The Australian dollar is supported by the Reserve Bank of Australia's "cautious and gradual" easing policy stance, as well as improvements in risk sentiment. The attractiveness of the Euro stems from expectations that increased defense spending will support the Eurozone economy and the European Central Bank's more hawkish stance. Meanwhile, the situation for the US dollar appears more daunting, with data showing that US employment growth in July fell below expectations, and previous months' data were revised downwards. Saurabh Tandon, Global Head of FX Options at Standard Chartered Bank in Singapore, said that after the release of US non-farm payroll data, there is strong interest in bullish options for the Euro against the US dollar and the Australian dollar against the US dollar. He stated that the market is currently "focused on upcoming events," such as US inflation and the Federal Reserve's Jackson Hole Symposium. The rise in bullish options for the Australian dollar and the Euro indicates that the market increasingly believes that the US dollar will depreciate further, and also suggests that traders are becoming more cautious in position allocation against the backdrop of tariff risks and deteriorating data from the world's largest economies. Previously, as countries began reaching trade agreements with the US, some investors began bullish on the US dollar, but now this trend has reversed. Jamie Sanders, Head of FX Options Trading at Royal Bank of Canada Capital Markets in London, said, "After news of the EU reaching a trade agreement with the US was announced, we saw directional demand for the US dollar through options trading, but this trend was quickly suppressed by negative non-farm payroll data revisions." Data from the Chicago Mercantile Exchange Group shows that on August 7, the trading volume of bullish options on Australian dollar for expiring in September was three times that of bearish options, and the value of such bullish options will rise as the Australian dollar appreciates against the US dollar. During the same period, the trading volume of bullish options for the Euro was 77% higher than bearish options. The National Australia Bank noted that there has been an increase in demand for bullish options on the Australian dollar and the New Zealand dollar. Con Davelis, Head of FX Options in Sydney at the National Australia Bank, said, "Following the recent non-farm payroll data release, we observed active trading on short-term bullish options for the Australian dollar/US dollar and the New Zealand dollar/US dollar, reflecting market expectations for the upcoming busy data week." It is understood that several key data and events are expected this week. The market expects the US CPI for July, to be released on Tuesday, to rise 2.8% year-on-year, higher than June's 2.7%. The market also anticipates that the Reserve Bank of Australia will cut its official cash rate (OCR) by 25 basis points to 3.6% on Tuesday, with RBA Governor Michele Bullock maintaining a cautious stance on monetary policy prospects.