Mexico’s fiscal balance worsened, increasing from a deficit of 21.031 billion pesos to 198.11 billion pesos in August. This change indicates significant fiscal adjustments in the Mexican economy. In currency news, the EUR/USD pair is holding steady between 1.1550 and 1.1540. On the other hand, the GBP/USD is experiencing a downward trend, reaching lows not seen in six months.

Commodities And Cryptocurrency Market

In the commodities market, gold is facing resistance around the $4,050 mark. However, it continues to attract investors seeking safe havens. In the cryptocurrency sector, Zcash is on an upward trajectory, trading close to $360. This month marks 17 years since Bitcoin’s whitepaper was released, highlighting its growth into a digital asset worth trillions. Additionally, trade discussions between Xi and Trump focus on regulations and export strategies. The FXStreet platform provides insights and updates but emphasizes the importance of personal research. It encourages individuals to understand the risks and responsibilities of financial investments, as FXStreet does not offer personalized investment advice. Mexico’s rising fiscal deficit, now at -198.11 billion pesos, poses a serious concern for its economic stability. This situation suggests considering short positions on the peso, as such a large deterioration often leads to currency devaluation. Recent data shows the USD/MXN pair at 19.50. Given the peso’s past volatility during the 2024 election cycle, options traders should consider buying puts on the MXN.

The Dominance Of The US Dollar

The US Dollar maintains its strong position, supported by the Federal Reserve’s aggressive approach, keeping interest rates at 5.75%. This strength suppresses other major currencies, holding the EUR/USD near 1.1550 and pushing the GBP/USD to six-month lows. Traders might look into using futures to short the Euro or consider buying call options on the US Dollar Index (DXY) to capitalize on this trend. China’s declining manufacturing PMI, currently at 49.0, casts a shadow over global growth and demand for industrial commodities. This affects currencies linked to Chinese growth, such as the Australian dollar, which struggles to stay above 0.6550. Recent drops in iron ore prices below $100 per tonne reinforce this negative outlook for commodity-related currencies. Gold finds itself in a challenging situation, as demand for safe havens pushes its price near $4,050. Yet, a strong dollar and high US Treasury yields limit its potential for growth. We witnessed a similar situation in late 2023, where high interest rates diminished gold’s attractiveness despite global uncertainty. This trend suggests that selling out-of-the-money call spreads above recent highs might be a more effective strategy than anticipating a major price breakout. Create your live VT Markets account and start trading now.

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