In June, Canada’s industrial product prices rose by 0.4% from the previous month, exceeding the expected increase of 0.1%. This shows stronger pricing trends in Canadian industrial products than anticipated. The AUD/USD pair bounced back, climbing above the 0.6500 mark due to a sell-off in the US Dollar. Likewise, EUR/USD moved above 1.1700 as the US Dollar weakened, amid trade concerns and speculation about the Federal Reserve’s independence.

Gold Prices Surge

Gold prices soared past $3,400 per troy ounce, benefiting from low US yields and a weak US Dollar. Additionally, Ripple (XRP) is nearing its all-time high, fueled by strong institutional demand and increased market activity. China’s GDP grew by 5.2% year-on-year in the second quarter, thanks to strong trade and industrial activity. However, slowdowns in investment and retail sales, along with falling property prices, are still concerning for the economy. Given the surprising rise in industrial prices, we see a potential for ongoing inflation in Canada. The latest Consumer Price Index of 2.9% supports this idea. We believe this strengthens the case for call options on the Canadian dollar, as the central bank might need to maintain a more aggressive stance longer than other central banks.

Opportunities In The Forex Market

The overall weakness in the US dollar, with the Dollar Index (DXY) falling below 105, presents a clear opportunity in the forex market. The recovery of the Australian and European currencies is a direct result of this trend. We are considering put options on the US dollar or call options on these major currency pairs to take advantage of this momentum. The price surge in precious metals, which recently reached a record high above $2,400 per ounce, serves as a direct hedge against a weaker dollar and lower yields. Long-term futures contracts on these commodities allow us to benefit from this ongoing safe-haven demand. Regarding the digital asset mentioned, it is still well below its 2018 high, making options that capitalize on its high volatility a smarter strategy than betting on new peaks. China’s latest Caixin Manufacturing PMI reading of 51.7 confirms the industrial strength reflected in the growth data. However, ongoing weakness in the property market and sluggish consumer spending paints a mixed economic picture. This encourages us to consider pairs trades, such as going long on industrial commodities that benefit from exports while exercising caution on assets tied to domestic consumption. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now