Ireland’s Harmonised Index of Consumer Prices (HICP) increased by 1.6% year-on-year in July 2025, matching expectations. This is consistent with earlier forecasts, keeping the same annual growth rate as previous reports. The GBP/USD currency pair rose above 1.3400 after the Bank of England made a modest policy rate cut of 25 basis points. This decision came after a close vote, where four policymakers wanted to keep rates steady, which helped support the Pound Sterling. EUR/USD traded near 1.1650 as markets waited for US data. The US Dollar showed some weakness, but a drop in the EUR/GBP after the BoE’s decision limited gains for the pair. Gold prices fell after hitting a two-week high, trading below $3,400 but still above $3,900 due to geopolitical tensions. Bitcoin stayed steady below the $116,000 resistance, as new US tariffs took effect, indicating indecision among traders. The US economy faces uncertainty due to ongoing trade volatility. Signs are pointing to an upcoming economic slowdown, but sharp fluctuations in trade seem to be over. Given the close vote at the Bank of England, the future trajectory for GBP is uncertain. While a 25 basis point cut was anticipated, the strong disagreement suggests that future cuts are not assured, which may limit downside risk for the pound. We are exploring short-term volatility strategies on GBP/USD, possibly using options straddles to capture movements around the 1.3400 level. All eyes are on this Friday’s US Non-Farm Payrolls report, as it could guide moves in EUR/USD. After last month’s disappointing report, which showed only 95,000 jobs added, another weak result could confirm a slowdown in the US economy and push the pair towards the 1.1800 resistance. We are staying cautious and waiting for this crucial data before increasing any long dollar-negative positions. Gold continues to act as a safe haven in today’s climate. Its ability to stay above $3,900 an ounce, even after a slight drop, signals strong support from ongoing geopolitical risks and economic concerns. We view any pullbacks as potential chances to buy call options, as we expect uncertainty to keep demand high. The stall in Bitcoin below the $116,000 resistance level indicates trader indecision. Open interest on major crypto derivative exchanges has dropped nearly 15% this past week, showing that capital is being set aside due to the new US tariff uncertainties. We are refraining from making significant directional bets until a clear breakout occurs. With signs of a potential US economic slowdown becoming more evident, we are considering protective strategies for equity portfolios. The VIX, which measures expected market volatility, has climbed to 22.5, a level we haven’t seen since the first quarter of this year. This suggests that buying put options on major indices like the S&P 500 could be a smart hedge for the weeks ahead.

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