Mexico’s trade balance in June was $0.595 billion, a significant improvement from the previous $-0.059 billion. This indicates a positive shift in Mexico’s economic activities. The AUD/USD pair is in a downward trend, approaching the 0.6500 level, as the US Dollar gains strength. Meanwhile, the EUR/USD pair has faced significant losses, slipping below 1.1600 due to the Dollar’s robust performance following trade agreements.

Gold And Ethereum Prices

Gold prices have fallen to about $3,300 per troy ounce as trade confidence rises after new agreements between the US and EU. Ethereum is currently valued at $3,803, with a recent peak of $3,941, buoyed by positive movements in the digital asset market. The Federal Reserve is under scrutiny for delaying rate cuts amid ongoing tariff uncertainties and a seemingly stable economy. There are worries the Fed may have missed its chance, especially as signs of weakness appear in the labor market. For those trading EUR/USD, we have a list of top brokers offering competitive spreads and strong platforms. These options cater to both new and experienced traders looking to navigate the changing Forex environment.

Federal Reserve’s Market Influence

The Federal Reserve’s reluctance to cut rates is a key factor impacting the markets. Recent inflation data shows the Consumer Price Index at 3.3% for the 12 months ending May 2024, which supports the Fed’s decision and keeps the US Dollar strong. This suggests that derivative positions favoring the Dollar are appealing for now. The differences in central bank policies make shorting the EUR/USD pair an attractive option, especially since the European Central Bank has started to ease with a recent rate cut. We also see the Australian Dollar as vulnerable due to its sensitivity to global risk and the Dollar’s strength. Therefore, buying put options for these currencies may be a wise strategy. However, we should remain alert for signs of economic weakness, as evidenced by US job openings dropping to 8.1 million in April 2024—a three-year low. If the labor market worsens, this could lead to a quick policy reversal, weakening the Dollar and boosting safe-haven assets. In this case, call options on gold, which is currently around $2,300 per ounce, might provide effective protection against a sudden shift in monetary policy. Mexico’s recent trade surplus highlights its economic resilience, a quality not always found in emerging markets. This strength presents an opportunity for long positions in the Mexican Peso compared to currencies facing greater challenges. We believe this could be a good relative value trade in the coming weeks. The digital asset market is showing its own dynamics, with Ethereum displaying notable strength. Historically, cryptocurrencies have sometimes acted as a hedge during periods of uncertainty in fiat currencies, a trend we are closely observing. Therefore, we will manage crypto derivatives separately from our broader macroeconomic approach. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now