Canada’s international merchandise trade balance for June was reported at -$5.86 billion, slightly higher than the forecast of -$5.8 billion. This suggests difficulties in the trade sector for the month. The EUR/USD exchange rate is gaining strength, approaching the 1.1600 level, thanks to a weak US Dollar. Meanwhile, GBP/USD is also rising above 1.3300, hitting a daily high due to the dollar’s reduced value. Gold is trading near $3,400, benefiting from the mixed performance of US yields and uncertainty around the US Dollar. In the cryptocurrency market, interest in DeFi platforms is growing, as shown by an increase in the total value locked (TVL). The euro area economy is showing surprising strength, aided by the EU-US deal and increased spending in Germany. However, there are risks of potential cuts in early 2026, depending on wage indicators. For trading EUR/USD, several brokers are recommended for their benefits, suitable for both new and experienced traders. It’s important to remember the high risks involved in trading foreign exchange on margin due to leverage. With the current weakness of the US Dollar, we are exploring opportunities in other currencies trading against it. The latest US CPI report for July 2025 shows inflation at 2.8%, suggesting that the Federal Reserve may stop its tightening cycle that started back in 2022. This environment makes shorting the dollar a promising core strategy. We continue to see momentum in EUR/USD, especially as the euro area economy demonstrates resilience. The Eurozone inflation rate for July remained steady at 2.5%, and the European Central Bank appears committed to keeping rates stable for now. Trading call options on EUR/USD with a target of 1.1600 or higher looks feasible. We are also optimistic about GBP/USD, which has already risen past the 1.3300 level. This trade mainly bets against the dollar’s decline rather than indicating unique strength in the UK economy. We will watch for chances to buy on any small dips. Canada’s reported trade deficit of -$5.86 billion in June points to ongoing economic challenges. This continues the trend of deficits we’ve seen since early 2024, which could limit the Canadian dollar’s upside. This might make put options on the CAD appealing against stronger currencies like the Euro. As gold approaches $3,400, we believe its strength is well-supported by fundamental factors. Data shows that central bank buying has remained strong, continuing robustly from record levels in 2022 and 2023 through the first half of this year. This, along with a weak dollar, makes buying dips in gold futures or related call options an attractive strategy. In the digital asset space, we notice a clear return of risk-on sentiment in DeFi. Total value locked across major protocols has surpassed $150 billion, a significant level not seen since the market recovery in early 2024. This renewed interest could bolster derivatives on major DeFi-related tokens in the coming weeks.

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