Mortgage applications in the United States increased by 1.1% as of June 20, recovering from a previous drop of 2.6%. This indicates a shift in the mortgage market from its earlier downward trend. The EUR/USD exchange rate is approaching its 2025 peak of 1.1640. The Euro’s rise is linked to the weakening of the US Dollar, showing a return to a risk-on trading atmosphere.

Currency Market Update

In other currency updates, GBP/USD has reached daily highs near 1.3640. This increase aligns with the declining strength of the US Dollar and reflects strong positive sentiment in the market. Gold prices have begun to recover after a slight dip. They dropped near $3,310 but are now around $3,340. This rebound is supported by mixed US yields and a weaker dollar. The cryptocurrency market is also showing positive trends, with Bitcoin targeting $110,000. A recent ceasefire between Israel and Iran has boosted market confidence. Ethereum and XRP derivatives are also suggesting a possible upward trend. We are now seeing strength across several areas that were under pressure just weeks ago. The 1.1% rise in US mortgage applications, after a previous 2.6% decline, indicates improved sentiment among applicants and shows resilience despite earlier rate concerns. This change may seem simple, but it truly emphasizes that mortgage-sensitive segments are making slight gains as borrowing conditions remain stable without unexpected moves from policymakers. A drop in refinancing activity could have allowed more confident or first-time buyers to re-enter the market. For us, this means we see long-term bond volatility as more measured than before. The Euro’s strength near its 2025 high of 1.1640 against the US Dollar is not just happening randomly. The ongoing weakness of the Dollar is a key factor. However, this increase in the Euro suggests a broader interest in assets less tied to the Dollar, including emerging market risks and European equities. For those focused on interest rate differences, the Euro’s strength raises questions about future moves. If US rates remain steady while European data improves, it could make Euro calls more appealing. Meanwhile, Sterling is gaining ground, rising to 1.3640 against the Dollar without sudden actions from UK policymakers. Weaker US numbers have contributed, but the surprising lack of strong local news driving this movement suggests that market expectations may be underestimating potential strength. With solid liquidity and low volatility, implied rates may still not reflect actual market movement.

Gold and Crypto Market Dynamics

Gold’s recovery to about $3,340 after a brief dip to $3,310 reflects a complex relationship between yields and a softer dollar. There isn’t a strong yield trend—sometimes short-term rates drop and other times long-term rates rise. This variability in rates allows gold some breathing room. We believe the options market is not sufficiently showing directional confidence. If gold dips below $3,300, we could see significant buying interest, especially from Asia. In the cryptocurrency space, momentum is on the rise, with Bitcoin aiming for $110,000. Digital asset confidence often improves when geopolitical tensions ease, and this week’s truce between Israel and Iran has certainly supported that sentiment. Ethereum and XRP derivatives are showing signs of renewed buying interest, indicating a persistent bullish trend from leveraged traders. Notably, futures movements are now closely tracking EUR/USD and GBP/USD flows, suggesting that macro and crypto markets are becoming more interconnected. We are slightly adjusting our expectations for future volatility, especially in crypto strategies, while favoring delta-neutral positions until realized volatility increases. For macro traders, this week has provided valuable signals—from rising FX averages to stable commodities—all while data releases remain manageable. If the Euro and Pound continue to rally without new developments, short positions in the US Dollar may become more popular in portfolios. Create your live VT Markets account and start trading now.

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