In May, new home sales in the US totaled 623,000, which is lower than the expected 690,000. This shortfall suggests a decline in the housing market’s performance. The EUR/USD is approaching a peak not seen since 2025, recovering from previous lows. A weakening US Dollar is influencing both the EUR/USD and GBP/USD, with GBP/USD reaching elevated daily levels.

Gold on the Rise

Gold is bouncing back, climbing from a weekly low to around $3,340 per troy ounce. This increase comes as the US Dollar weakens and American yields show mixed results. Bitcoin is rebounding, targeting $110,000, while Ethereum and XRP also show signs of potential gains. This recovery follows a drop below $100,000 during a sell-off over the weekend. The ongoing tensions between Israel and Iran are raising fears about the possible closure of the Strait of Hormuz, which could greatly affect global oil markets due to its strategic importance. The gap between the actual new home sales of 623,000 and the expected 690,000 indicates a decline in consumer confidence or affordability, perhaps both. With interest rates high and wages not keeping pace with rising prices, the housing sector is not recovering as hoped. This situation serves as a key indicator for broader economic sentiment, especially regarding disposable income and domestic demand. For those analyzing risk appetite through indirect measures, this points to a weaker American consumer, which could lessen the pressure for future rate hikes and change probabilities for rate-linked products.

FX Market Trends

In the foreign exchange market, the EUR/USD is steadily moving back toward the upper range of its multi-year levels. This rise is happening amid a quieter Federal Reserve and slowing US economic data. As US Dollar-linked trades evolve, the weakening USD brings focus to rebalancing efforts. GBP/USD also benefits from its own specific drivers, though its daily momentum suggests limited upward movement unless wage or inflation data in the UK improves. From our view, this divergence from previous trading ranges hints at a repricing phase that will impact hedging strategies across euro and pound currency pairs. Gold’s rise from the weekly low to around $3,340 per troy ounce reflects the declining strength of the US Dollar. Although bond yields remain unpredictable, their failure to significantly increase supports gold’s position. We are seeing broader market participants returning to metal hedges—not due to inflation concerns this time, but in response to geopolitical issues and currency weakness. This aligns with gold acting more as a liquidity option rather than just a safe haven. Futures positioning indicates a return to long contracts; options traders are likely to notice renewed interest in upward price movements. In the wider digital asset market, Bitcoin is making a comeback after a steep drop, moving back toward the $110,000 level. The weekend sell-off showcased vulnerabilities in thin liquidity conditions, but the rebound suggests there is still demand, especially as macro risks ease. Other cryptocurrencies like Ethereum and XRP are following this trend, although they are lagging slightly. Earlier sell-side activity has shifted, causing volatility patterns to steepen again. Those involved in crypto derivatives should reevaluate their gamma exposures, as market movements still seem to react to overall market stability rather than inherent strength. Concerns about Middle East tensions, particularly regarding disruptions in the Strait of Hormuz, remain significant risks. With about 20% of global oil trade passing through that corridor, any escalations that threaten safe passage would quickly affect energy futures. Prompt spreads are especially sensitive here, creating opportunities for those structuring calendar spreads and who want to manage shipping or insurance risks. This external factor has not yet been factored into VIX or inflation swaps and could emerge unexpectedly. Thus, we may need to focus less on interest rates and more on cross-asset correlations, particularly how volatility in commodities might influence rates or FX markets indirectly. Create your live VT Markets account and start trading now.

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