ANZ job advertisements in Australia fell by 0.8% in November, an improvement from the previous decline of 2.2%. This suggests a slower drop in job ads and offers some hope for the job market. In other news, silver prices reached record highs above $57.50. However, the Relative Strength Index (RSI) indicates it might be overbought, which could limit further gains for XAG/USD.

NZD/USD and GBP/USD Currency Movements

The NZD/USD stayed steady near a one-month high just below the mid-0.5700s, despite weak data from China. The GBP/USD remained around 1.3250, buoyed by a positive UK budget. China’s manufacturing PMI fell to 49.9 in November, below the anticipated 50.5, signaling contraction. The EUR/USD faced resistance near the 200-day Simple Moving Average (SMA) but stayed above 1.1600. In commodities, gold rose to $4,250 as expectations of a Federal Reserve interest rate cut weakened the US Dollar. However, notable crypto losers at the beginning of December included Zcash, Starknet, and Ethena, all showing further declines. Ripple’s price remained stable, trading between $2.15 and $2.30 for four consecutive days. This tight range suggests ongoing market uncertainty.

The Impact of the Weak US Dollar

The market is currently focused on one main issue: the weak US Dollar. There are strong expectations for a Federal Reserve interest rate cut this month, which is benefiting other currencies and assets. This makes long positions in pairs like EUR/USD, which is climbing above 1.1600, a key focus for the next few weeks. This sentiment is backed by a steady decrease in US inflation since its peaks in 2024, with the latest Core PCE reading at 2.8%. Although the labor market continues to add jobs, the pace has slowed to an average of 150,000 per month in the latter half of this year, allowing the Fed to ease its policies. This data strengthens the notion that we should not oppose the Fed’s dovish stance. In Australia, the job market shows slight improvement, with job ads down only 0.8% in November compared to a 2.2% drop earlier. However, we need to be cautious about the Australian dollar’s strength. Weak manufacturing data from China, a major trading partner, may limit any significant rallies. The slow GDP growth of 0.2% observed in the third quarter of 2025 reinforces this cautious perspective for Australia. This slow growth environment makes it difficult to support aggressive long positions on the Aussie dollar, even with a weak US Dollar. Strategies like call spreads on the AUD/USD might help manage risk. For traders looking to capitalize on the weak dollar theme, commodities are a promising area. Silver has hit a record high over $57.50, and gold is pushing past $4,250. Using call options on gold and silver ETFs could provide upside exposure while managing the risk of a potential short-term pullback. A clear divergence trade is forming against the Japanese Yen. While we anticipate rate cuts from the Fed, the Bank of Japan is openly discussing rate hikes. This policy difference suggests that shorting the USD/JPY pair, possibly using futures or put options, could be a compelling strategy in the coming weeks. Create your live VT Markets account and start trading now.

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