In September, new home sales in the United States fell to 0.738 million, down from 0.8 million the month before. This shows a slowdown in the housing market compared to earlier. US retail sales will be watched closely, as will inflation data and updates from the Federal Reserve. Gold prices have dropped under $4,600, influenced by easing Consumer Price Index data in the US and pressures on the US dollar.

The Impact On Commodities And Currencies

The Australian dollar lost value as markets reacted to US inflation data. Meanwhile, tensions with Iran led to a rise in WTI oil prices, although increasing Venezuelan oil exports limited these gains. The British pound remains stable near 1.3450 as US inflation expectations shift. The USD/CAD exchange rate is steady, balancing the effects of US disinflation with support for the Canadian dollar driven by oil prices. For currency traders, recommendations for top forex brokers are emerging for 2026. These options cater to various trading needs, focusing on cost savings and currency pairs like EUR/USD. Insights are also available for traders in regions such as MENA and Latin America.

Potential Federal Reserve Actions

The drop in new home sales to 738,000 last September signals a slowdown in the U.S. economy. This, along with falling inflation data from the end of 2025, suggests the Federal Reserve may soon cut interest rates. We should prepare for a more accommodating Fed in the near future. This situation makes interest rate derivatives worth considering. Markets are already factoring in potential rate cuts, with Fed Funds futures indicating a greater than 70% chance of a cut by the March 2026 FOMC meeting. Traders might want to take positions that benefit from decreasing short-term rates over the next one to two quarters. In currency trading, expectations of rate cuts from the Fed may weaken the U.S. Dollar. Historically, the dollar tends to drop when the Fed starts easing, as seen in 2007 and 2019. Strategies that bet on a stronger EUR/USD or GBP/USD, like buying call options, could be advantageous. For commodities, despite gold’s recent drop below $4,600, the outlook remains positive. Lower interest rates and a weaker dollar typically support gold prices, making this recent decline a potential buying opportunity. Oil prices continue to be affected by geopolitical tensions, leading to volatility that traders might leverage using strategies like straddles to profit from significant price movements in either direction. Overall, market volatility is expected to rise as we approach a possible policy change from the Fed. The CBOE Volatility Index (VIX), which stayed in the low teens for much of 2025, has now risen to the high teens. This indicates it’s a good time to use options to manage risk and benefit from anticipated price fluctuations across different asset classes. Create your live VT Markets account and start trading now.

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