Pending home sales in the United States saw a slight increase of 0.7% in August compared to last year. The market data shared here is for informational purposes only and does not encourage trading. The AUD/USD pair stayed steady below 0.6600 ahead of important Chinese PMIs and decisions from the RBA. The strength of the US Dollar was limited due to concerns about possible rate cuts and a potential US government shutdown. Similarly, USD/JPY remained stable near the 200-day SMA, held back by a cautious outlook from the Federal Reserve and fears of the same government shutdown.

Gold And Bitcoin Stability

Gold prices rose to record highs, driven by expectations of Federal Reserve rate cuts and ongoing geopolitical tensions. Bitcoin’s price stabilized above $114,000 as worries about a US government shutdown grew; this matches predictions for a strong October. Jerome Powell mentioned that the Federal Reserve faces challenges, indicating a balanced view. Various brokers are available for different trading needs, including EUR/USD, highlighting low spreads and high leverage. Trading foreign exchange involves significant risks due to leverage. Potential traders should carefully evaluate their goals and risks. FXStreet is not responsible for any losses incurred from the information provided, and it’s recommended to consult independent advisors. As the Federal Reserve hints at a more cautious approach and with a possible US government shutdown on the horizon, the US Dollar is in a defensive position. Recent inflation data from August 2025 showed a CPI of 2.8%, suggesting the Fed has little cause to raise rates. This situation advises traders to be careful with long US Dollar positions in the coming weeks.

Market Volatility Concerns

The rising uncertainty from Washington signals greater market volatility ahead. Derivative traders might consider buying options to profit from sudden price shifts, especially with the Non-Farm Payrolls data release this Friday. Past government shutdowns, like the one in 2018, have resulted in short-term spikes in volatility indices such as the VIX. The latest housing data reveals that pending home sales increased only 0.7% in August, indicating the economy is slowing due to high interest rates. Even though 30-year mortgage rates have dropped to 5.9% this year, the housing market struggles to gain momentum. This weakness may give the Fed more room to consider further rate cuts, which would put additional pressure on the dollar. In this climate, there’s a noticeable flight to safety, with gold reaching new all-time highs. The combination of geopolitical tensions and a weaker dollar boosts gold’s appeal. Traders might use call options on gold futures (GC) or gold-backed ETFs to maintain upward potential while managing risk. Bitcoin, benefiting from the dollar’s decline, is holding steady above $114,000. Market sentiment is shifting towards the “Uptober” narrative, which refers to the historically strong performance of cryptocurrencies in October. This could draw in speculative interest, especially if the government shutdown occurs, pushing investors towards alternative assets. In the currency market, the Australian dollar awaits clear signals from the upcoming Chinese PMI data and the Reserve Bank of Australia. Meanwhile, the Japanese Yen is caught in a mix of the Bank of Japan’s uncertainty and the overall weakness of the US Dollar. This scenario may provide opportunities for range-bound strategies on USD/JPY until a clearer trend develops. Create your live VT Markets account and start trading now.

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