Japan’s retail trade rose by 1.7% year-on-year in October, beating the expected 0.8% increase. This may suggest a stronger retail environment in the country. In financial news, the British Pound climbed to nearly 1.3250 as speculation about a possible Federal Reserve rate cut grew. The Euro remained steady around 1.1600 due to low trading activity, with US markets closed for Thanksgiving.

Gold and Cryptocurrency Gains

Gold moved closer to $4,200, supported by expectations of future Fed rate cuts that weakened the US Dollar. In the cryptocurrency world, Pi Network, Sky, and Ether.fi saw gains, with Pi Network’s increase linked to its partnership with CiDi games. UK and European stock indices dipped slightly, with attention on the UK budget. Meanwhile, Ripple’s XRP struggled to gain momentum, trading around $2.19, even after receiving regulatory approval for its RLUSD stablecoin in the UAE. FXStreet warns that this information comes with risks and advises against using it as the sole basis for investment decisions. They stress the importance of conducting thorough research before making any financial commitments, noting that investments carry risks, including possible loss of principal.

Opportunities and Risks in the Market

With a high chance of a Federal Reserve rate cut in December, we should explore derivative investments that benefit from a declining US dollar. Buying call options on pairs like GBP/USD and EUR/USD can directly capitalize on this trend, which has already led the pound to a seven-day winning streak. Current market data, like the CME FedWatch tool, indicates over an 85% chance of a 25-basis-point cut at the next meeting. The weakening dollar is also boosting gold, bringing it close to $4,200. We should think about purchasing gold futures or call options to ride the momentum, as lower interest rates reduce the cost of holding non-yielding gold. We’ve seen this pattern before during the early 2020s when the dovish Fed policy pushed gold prices to new heights. We also need to watch the Japanese Yen, as its fundamentals are shifting. Japan’s retail sales increased by 1.7% year-over-year, more than double the forecast, but yen bulls remain hesitant. This creates a potential opportunity to buy put options on USD/JPY, betting that this strong domestic data will eventually lead the Bank of Japan to adopt a less dovish approach. For equity traders, the expectation of looser monetary policy should support US stock indices. The healthy breadth of the stock market leading into the Thanksgiving holiday indicates a solid rally. With over 90% of S&P 500 companies having reported Q3 earnings in 2025 that exceeded expectations by an average of 4.5%, there is strong fundamental support for buying call options on major indices. Create your live VT Markets account and start trading now.

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