In June, South Africa’s Consumer Price Index (CPI) rose from 0.2% to 0.3% month-on-month. This small increase indicates a slow but steady rise in consumer inflation in the country. The EUR/USD pair has been declining, approaching 1.1700, as the US Dollar gains strength. This trend is connected to positive economic news in the US following a trade agreement with Japan.

Stability of GBP/USD

The GBP/USD is stable around 1.3550 during the European trading session, supported by positive market feelings. This optimism stems from the US-Japan trade deal, even though the US Dollar faces slight pressure. Gold prices have bounced back from previous lows, but they are not showing strong upward movement. The positive market outlook, driven by the US-Japan trade agreement, reduces the demand for gold as a safe-haven asset. BNB, formerly known as Binance Coin, hit a new high of $804.70, surpassing Solana’s market capitalization. This jump in BNB’s value pushed its market cap over $110 billion. During the first six months of Trump’s second term, there were divisive policy changes emphasizing “America First.” Nevertheless, markets have proven resilient in adjusting to the changed political environment.

Global Market Trends

The slight increase in South Africa’s CPI indicates ongoing, though controlled, global inflation. Given that recent US inflation data showed a slight decline to 3.3% in May, we suggest that traders explore strategies benefiting from stable interest rates instead of sharp spikes. Selling short-term strangles on interest rate futures could be a good option if low volatility continues. The downward trend in the EUR/USD, now around 1.07, is likely to persist due to differing central bank policies. With the European Central Bank recently cutting rates while the Federal Reserve maintains a tough stance, buying put options on the Euro seems a smart strategy to protect against further declines. This approach allows traders to benefit from a rising dollar. Although markets seem optimistic, the GBP/USD’s stability might be short-lived with the UK’s upcoming general election and ongoing domestic inflation. We recommend traders buy straddles on this currency pair to prepare for potential volatility spikes. This strategy profits from significant price movements in either direction without requiring a specific outcome. Gold’s moderate recovery reflects ongoing uncertainty, even with positive sentiment. Futures contracts could be a way to express views on gold’s future movements, heavily influenced by US interest rates. Selling call options against a long gold position can help generate income while waiting for a clearer trend. BNB’s recent price surge showcases the high volatility in the crypto markets. We recommend exercising caution when using derivative products like perpetual futures, especially with strict stop-loss orders to manage potential sharp reversals. Those looking to protect their existing crypto holdings may find value in purchasing put options. As we consider the political environment affecting the markets during Trump’s second term, we expect increased volatility with policy announcements. Historically, the CBOE Volatility Index (VIX) rises during political uncertainty, as seen before the 2016 election. Buying long-dated VIX call options is an effective way to protect portfolios against potential market fluctuations in the upcoming months. Create your live VT Markets account and start trading now.

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