Eurozone construction output fell by 0.1% in August, down from a 0.5% increase the month before. This decline shows that construction activity in the Eurozone is slowing. Gold prices increased to $4,300 after previously dipping to $4,200. Ongoing uncertainties in US-China trade and expectations of a more lenient Federal Reserve helped boost these prices.

The Euro’s Steady Trade

The euro held steady at around 1.1650 after a prior decline, partly due to S&P Global Ratings downgrading France’s credit rating to A+. Improved market sentiment helped support the euro despite recent struggles. GBP/USD dropped toward 1.3400 as the UK prepared to release inflation data. The US Dollar remained strong against other currencies. The upcoming UK inflation numbers are likely to have a big impact on this currency pair. Cardano (ADA) traded at about $0.64, experiencing a nearly 7% decline recently. A drop in trader confidence and an increase in short positions suggest that the cryptocurrency could face further declines. The focus now lies on US-China trade talks and US inflation data. These elements are important for guiding market trends and economic views for the week ahead.

Market Strategies and Expectations

The recent 0.1% drop in Eurozone construction output for August confirms a broader economic slowdown. This, along with S&P’s credit downgrade of France, hints at a weaker euro. We are considering put options on the EUR/USD. Manufacturing PMI data from last week indicated a fourth consecutive month of contraction in the region. Inflation data from the UK and the US will likely create significant volatility in currency markets. We have seen sharp market reactions to inflation surprises this year, suggesting that strategies like straddles on GBP/USD could be profitable. This would allow us to benefit from major price movements in either direction once the data is released. Gold’s stability above $4,300 indicates that traders are hedging against geopolitical risks related to US-China discussions and a potentially more lenient Federal Reserve. Data from the World Gold Council revealed strong central bank buying in the third quarter of 2025, providing solid support for the price. We view this as a chance to buy call options on gold futures to hedge against market uncertainty. In the cryptocurrency market, the trends in Cardano derivatives signal caution for altcoins. A drop in open interest to a yearly low, along with a rise in short positions, shows waning trader confidence. We believe this is a time to be careful and may consider using put options to protect crypto portfolios from further declines. Create your live VT Markets account and start trading now.

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