Canada’s retail sales, excluding vehicles, fell slightly by 0.2% in May compared to the previous month. This decline was better than the expected drop of 0.3%. The EUR/USD pair was around 1.1770 as markets reacted to the recent ECB meeting. There’s optimism about a possible trade deal between the US and EU.

GBP/USD Movement

GBP/USD has come under renewed pressure, dropping into the low-1.3500s due to mixed economic data from the UK. Gold prices bounced back a bit after falling below $3,350, but they remain under $3,400. The price fluctuations are influenced by favorable movements in the USD and rising US yields. In the crypto market, Bitcoin regained $118,000, while Ethereum and XRP showed signs of weakness. Ethereum is now at $3,630, down 6% from its recent high of $3,858. During the first half of Trump’s second term, there were unpredictable policy changes but the market remained strong. His “America First” agenda influenced trade and national priorities.

Canadian Retail Sales Data

The recent Canadian retail sales report indicates a 0.9% increase in January 2024, reflecting consumer strength. This could temporarily support the Canadian dollar. We are preparing for potential currency volatility and using options to guard against sudden changes in central bank policies. The Euro is performing weakly against the dollar at around 1.0850, as the European Central Bank seems poised to cut interest rates before the U.S. Federal Reserve. This difference in policy suggests the EUR/USD may continue to decline, leading us to consider put options to benefit from this trend. The British pound is facing difficulties due to persistent high inflation in the UK, currently at 4.0%. This situation raises uncertainty for the Bank of England and has capped the pound’s value around 1.2600. Given the challenges ahead, we are cautious about holding long positions. Gold is having trouble staying above $2,200 per ounce, pressured by US 10-year Treasury yields that are above 4.2%. Historically, high yields and a robust dollar reduce the appeal of gold, which doesn’t yield interest. We think selling call options could be a wise strategy to benefit from what appears to be limited upside. In the cryptocurrency market, a significant shift is happening as Bitcoin nears $70,000 while altcoins like Ethereum show weakness. Bitcoin’s market share has risen above 52%, its highest since April 2021, indicating a trend towards safety. This suggests a trading strategy of buying Bitcoin while selling less stable altcoins could be effective. The market should brace for potential shocks due to Trump’s unpredictable policy agenda. The possibility of a universal 10% import tariff could lead to market volatility similar to the trade tensions of 2018. As a precaution, we are increasing our exposure to VIX futures to hedge against sudden market downturns driven by political decisions. Create your live VT Markets account and start trading now.

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