The Canada Consumer Price Index (Core) dropped from 0.3% to 0.2% month-over-month in November. This trend shows that consumer prices are slowing down, which may affect future decisions by the Bank of Canada regarding interest rates. In other news, the GBP/USD is nearing 1.3400 as traders await the Bank of England’s policy decision. Meanwhile, the EUR/USD is trading close to multi-week highs, helped by a weaker US dollar and a cautious outlook from the Federal Reserve.

Commodities Market Overview

In the commodities market, gold has lost some momentum and is now below $4,350, but it remains in positive territory as the US dollar faces challenges. Solana’s price is above $131, with spot ETF inflows approaching $1 billion, indicating strong demand. The S&P 500 has been climbing, partly due to the US 2-year yield fluctuating around 3.50% after the Federal Reserve cut rates. This rate cut particularly benefits non-tech sectors. Regarding brokerage insights, the FXStreet team has identified the best brokers for 2025. They focus on brokers with low spreads and high leverage, suitable for trading EUR/USD and Gold while also reviewing regulations and features across different regions.

Interest Rates and Market Strategies

Canada’s core inflation decrease to 0.2% reinforces our belief that the Bank of Canada has finished its rate adjustments. With annual inflation at 2.4%, just above the bank’s target, the market expects a rate cut within the next quarter. We see value in buying call options on USD/CAD, anticipating a weaker loonie as interest rate differences change. Federal Reserve officials predict inflation will fall faster, back up what the bond market is indicating, as the US 2-year yield remains around 3.50%. This opens up opportunities in interest rate futures, particularly for long positions on Treasury Note futures, given the dovish trend. The futures market suggests there is over a 70% chance of at least two more rate cuts by mid-2026. We believe the market is preparing for a potential rate cut from the Bank of England, which could increase volatility in the pound. After the UK faced inflation over 10% between 2022 and 2023, the drop in CPI to 2.8% now allows for this policy shift. Traders might consider options strategies like straddles on GBP/USD to take advantage of expected price fluctuations around the upcoming BoE announcement. Gold’s steady price near $4,300 per ounce is mainly due to declining real interest rates as global dovish central bank policies take effect. This price level is supported by significant central bank purchases, which added over 1,500 tonnes to reserves in 2023 and 2024. Given the high nominal price, using call spreads on gold futures presents a defined-risk approach to stay bullish while managing costs. The growing interest in Solana, with spot ETF inflows nearing $1 billion since their introduction in 2025, shows that institutional players are buying on dips. With Solana stabilizing above $131, we expect a potential breakout driven by ongoing institutional support. Selling puts below this range can help collect premiums while betting that this institutional interest will maintain price support. Create your live VT Markets account and start trading now.

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