Canada’s international merchandise trade had a deficit of $6.32 billion in August, which is worse than the predicted $5.55 billion. This shows the ongoing economic trends and challenges affecting Canada’s trade situation. The Dow Jones Industrial Average struggled due to an ongoing government shutdown, which changed market conditions. At the same time, the Australian dollar remained strong against the US dollar, even though the US dollar itself was strong.

FOMC Minutes Analysis

Many people are closely watching the FOMC minutes for their potential impact on the financial market. In the meantime, Donald Trump has raised concerns about possible tariffs with Canada. The pound sterling experienced ups and downs, dropping as the US dollar gained strength during the shutdown. Gold prices also stalled below their peak, as people awaited a potential breakout at $4,000. In the crypto market, Bitcoin reached a new high of $126,199 but settled at $124,000. Meanwhile, Ethereum is also trying to reach record highs. In Japan, Sanae Takaichi’s recent leadership win brings both opportunities and challenges related to her economic agenda. Canada’s trade deficit in August was worse than expected, showing $-6.32 billion. This adds stress to the already weak Canadian dollar. With potential US tariffs looming, the outlook for the loonie appears weak in the near future. Traders might want to consider buying USD/CAD call options to prepare for more gains in this pair.

US Government Shutdown Impact

The ongoing US government shutdown is causing major market uncertainty, pushing the Dow down while making the US dollar stronger as people seek safety. We recall the long 35-day shutdown in 2018-2019, which can create prolonged market anxiety. This situation suggests that buying VIX futures or S&P 500 put options may help hedge against further stock declines. Political instability in both the US and Europe is driving a big rally in gold prices, testing the $4,000 mark. This is typical safe-haven behavior, boosted by ongoing strong purchases from central banks, as reported by the World Gold Council, continuing their high pace from 2022 to 2024. We recommend buying gold futures or call options on gold ETFs to profit from this fear-driven momentum. In Japan, the new leadership is likely to keep monetary policy very easy, which could keep the yen weak. With core inflation still not reaching the 2% target consistently, the Bank of Japan has little reason to tighten its policy soon. Thus, we see chances in purchasing USD/JPY call options, expecting the yen to weaken as the policy gap with the US widens. Bitcoin is stabilizing around $124,000 after hitting its all-time high, showing strong momentum driven by continued institutional investments since the approval of spot ETFs in early 2024. Given the high volatility, using bull call spreads on Bitcoin or Ethereum could be a smart way to stay invested while managing risk. Create your live VT Markets account and start trading now.

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