The Tokyo Consumer Price Index (CPI), excluding food and energy, held steady at 2.8% year-on-year in November. Ripple (XRP) is facing a decline, currently priced at $2.19. It has not been able to break through the resistance level at $2.30.

Upbit Hack and Cryptocurrency News

In recent news, Upbit experienced a $37 million hack due to a compromised Solana wallet. As a result, all withdrawals and deposits have been suspended. Gold prices surged significantly during the Asian trading session, nearing $4,200. This rise is driven by anticipated rate cuts from the Federal Reserve in December, which are putting pressure on the US Dollar and driving gold prices higher. The GBP/USD currency pair continues to rise, reaching approximately 1.3240 during Asian trading on Friday. This increase coincides with a weakening US Dollar, fueled by expectations of a Federal Reserve rate cut. Meanwhile, the EUR/USD pair remains steady due to low trading activity from the US Thanksgiving holiday. Although trading is stagnant, speculation about lower borrowing rates in the US continues to pressure the Dollar, allowing the Euro to be positioned for weekly gains. The current rate for the pair is 1.1596.

Outlook on Federal Reserve Rate Cuts

With a high likelihood of a Federal Reserve rate cut, we can expect continued weakness in the US Dollar into December. This situation suggests using derivatives to position for a lower dollar, like purchasing put options on the U.S. Dollar Index (DXY) futures. According to the CME FedWatch Tool, there is over an 85% chance of a rate cut next month, reinforcing the expectation of a weaker dollar. The rise in gold directly relates to falling interest rates and a weaker dollar, so it makes sense to expand bullish positions. Buying call options on gold futures can help capture further gains, pushing towards and possibly beyond the $4,200 level while minimizing downside risk. This approach worked well during the late 2023 speculation about rate cuts when gold prices hit record highs. Major currency pairs like GBP/USD and EUR/USD are likely to continue their upward trend against the dollar. We see an opportunity to buy futures contracts or call options on these pairs to benefit from this momentum. With Eurozone core inflation remaining strong at about 3.1%, the European Central Bank has less urgency to cut rates than the Fed, supporting a stronger Euro. In Japan, the ongoing core inflation rate of 2.8% is putting pressure on the Bank of Japan to tighten its policy, which would strengthen the yen. This creates a compelling trade opportunity against the dovish Fed, making short positions on USD/JPY especially appealing. We can take advantage of this by purchasing puts on USD/JPY, anticipating a decline as US rates drop and Japanese policy normalizes. The crypto market is showing signs of weakness, and the Upbit hack adds significant uncertainty for Solana and possibly for the overall market. Caution is warranted, and using derivatives to hedge or express a bearish perspective could be wise. Selling call options on XRP near its resistance level or buying puts on SOL may be prudent strategies to protect against further declines. Create your live VT Markets account and start trading now.

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