The Netherlands’ manufacturing output increased by 1.7% in August, bouncing back from a 1.4% drop earlier. In currency news, the Japanese yen is struggling due to political uncertainties, while the Australian dollar has lost value despite cautious forecasts from the Reserve Bank of Australia. EUR/USD rose above 1.1550 because of ongoing political issues in the Euro zone, finally breaking a four-day decline. GBP/USD stayed above 1.3300, aided by the cautious approach of the Bank of England. Gold prices remain below $4,000 but are supported by expectations of a US rate cut and geopolitical tensions.

Cryptocurrencies Seek Stability

Cryptocurrencies like Bitcoin, Ethereum, and Ripple have experienced corrections after rallies, with Bitcoin around $121,000. In the US, tariffs are still a major tool in foreign policy, despite daily news updates. In corporate news, Coinbase and Mastercard are looking to acquire stablecoin firm BVNK, with the deal estimated to be between $1.5 billion to $2.5 billion. The final outcome is still uncertain as talks are ongoing. Looking ahead, the EUR/USD may face resistance around 1.1575 due to political uncertainties in France. Recently, the gap between French and German 10-year government bonds has widened, signaling rising risk that traders should watch closely. This may suggest a good strategy would be to sell call options or set up bearish spreads to protect against possible reversals. The British Pound is holding steady above 1.3300, as the Bank of England remains cautious. UK core inflation has been tougher than in other G7 countries, leading the market to rule out any immediate rate cuts. This difference from the Fed’s expected policies may continue to support GBP/USD, making long positions appealing on any dips toward 1.3300.

US Dollar Strength and Gold Market Trends

We expect the US dollar to stay strong against commodity-linked currencies, with USD/CAD aiming for 1.4050. This trend is supported by the US government’s firm tariffs, which typically weigh down currencies like the Canadian and Australian dollars. In past trade disputes (2018-2019), the AUD/USD pair saw notable weakness, which could happen again. For gold, even though prices are under pressure below $4,000, the downside appears limited for now. The market is pricing in a strong chance of a Fed rate cut in early 2026, which supports non-yielding assets like gold. Any rise in geopolitical tensions or a prolonged US government shutdown could lead to a rush to safety, making put options on gold miners or long positions in gold futures a smart hedge. After hitting a record high, Bitcoin’s pause around $121,000 suggests caution for traders. We’ve noticed a significant drop in open interest for Bitcoin perpetual futures this week, indicating that enthusiasm among leveraged buyers is fading. This pattern resembles market tops we saw in 2021, suggesting that hedging long positions or considering short-term put options could be wise. Create your live VT Markets account and start trading now.

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