Colombia’s Consumer Price Index (CPI) for November is at 5.3% year-on-year, lower than the expected 5.45%. In other finance news, the EUR/USD exchange rate is stable at 1.1650, influenced by US inflation and possible actions from the European Central Bank. The GBP/USD has dropped to around 1.3320 after a unsuccessful rise.

Gold Prices and Cryptocurrencies

Gold is currently priced at $4,200 per troy ounce, as there is growing anticipation of a possible policy easing from the Federal Reserve. Bitcoin is holding steady above $91,000, while Ethereum remains over $3,100 ahead of the Federal Reserve’s upcoming meeting. Ripple is down to $2.06, as investor sentiment stays low despite consistent interest in XRP spot ETFs. In the coming week, the Fed is expected to announce a rate cut, and other central banks like the RBA, BoC, and SNB also have meetings coming up. Information from FXStreet includes risks and uncertainties and should not be considered investment advice. Readers should do their own research before making financial choices. FXStreet and its authors do not guarantee the accuracy or timeliness of the content and are not responsible for any errors or losses. As we approach the Federal Reserve meeting on December 10th, the market largely expects a rate cut. However, the real concern for traders lies in the updated dot plot and future guidance. Any indication of a “one and done” policy could lead to sudden market shifts. Thus, buying short-term volatility through options on SPX or VIX futures is a wise way to prepare for unexpected changes.

The US Dollar and Hedging Strategies

The weakness of the US Dollar is a key trend, driving pairs like EUR/USD higher. However, this trend has become crowded, making it susceptible to a sharp reversal if the Fed takes a hawkish stance. Consider hedging long forex positions by buying out-of-the-money put options on pairs such as EUR/USD for affordable protection against an unexpected dollar increase. Gold remains strong at $4,200 per ounce, a level that seemed far off after it first surpassed $2,400 in spring 2024. With so much optimism, holding long futures carries considerable risk. A smarter strategy would be to use bull call spreads, which limit potential gains but lower entry costs and define risk if the Fed’s remarks disappoint gold bulls. In cryptocurrency, Bitcoin is solidifying above $91,000 after a big surge linked to the ETF approvals of 2024. Implied volatility for options due after the Fed meeting is high, showing market uncertainty. We can capitalize on this by selling covered calls on existing Bitcoin holdings to earn income from higher premiums. The recent inflation data from Colombia shows a drop to 5.3%, highlighting the global trend of disinflation that has emerged since rates peaked in 2023, when Colombian inflation was above 10%. This improves the outlook for emerging market currencies burdened by high inflation, making futures on the Colombian peso increasingly appealing against the dollar. Create your live VT Markets account and start trading now.

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