Argentina’s Consumer Price Index (CPI) rose from 2.3% to 2.5% in November, indicating changes in the economy. This information sheds light on the nation’s inflation trends. In related news, the People’s Bank of China set the USD/CNY reference rate at 7.0638, down from 7.0686. The USD/CAD remained close to its lowest point since mid-September, around 1.3770.

The Strength of NZD/USD and AUD/USD

The NZD/USD gained ground, climbing above 0.5800 due to weaker jobless claims data from the US. The AUD/USD stayed stable above the mid-0.6600s, reaching a near three-month high. Gold prices surged past $4,250 as a rate cut by the US Federal Reserve weakened the US Dollar. The EUR/USD continued its upward trend during North American trading, supported by the Fed’s actions and soft US economic data. Zcash saw a 12% increase, fueled by rising interest and bringing its weekly gain to nearly 25%. The Federal Reserve’s 25 basis points rate cut set the target range at 3.50–3.75%. Solana’s price fell below $130, affected by broader market weakness due to the Fed’s tight policy stance. This demonstrates how recent rate cuts are impacting various financial sectors.

Market Reactions to Fed’s Decisions

The Federal Reserve’s choice to lower its key interest rate to a range of 3.50-3.75% is crucial for the market now. This decision, prompted by soft US job data, has sped up the US Dollar’s downward trend, which we have seen throughout 2025. In light of this, derivative traders should consider strategies that benefit from a weaker dollar, like buying puts on dollar-tracking ETFs. The dollar’s weakness is leading to strength in other major currencies. The EUR/USD is now over 1.17 and the GBP/USD is approaching 1.34, showing a clear divergence as the Fed eases while other central banks remain steady. Given this trend, it’s sensible to look at call options on the euro and the pound in the upcoming weeks. We are witnessing a historic climb in precious metals, with gold surpassing $4,250 an ounce. This significant rise is driven by the falling US dollar and lower interest rates, a combination that often sparks major gold bull markets. To take advantage of this trend, traders should consider buying gold futures or call options on gold-related stocks. However, it’s important to consider the broader global context, as inflation is still a concern in some areas. Argentina’s CPI just increased again, highlighting ongoing price pressures that have impacted the global economy in 2023 and 2024. This persistent inflation might limit the Fed’s ability to cut rates aggressively, potentially allowing the dollar to rebound later next year. Mixed signals from the Fed’s announcement have led to confusion, evident in the crypto markets. While some assets have risen, the drop in Solana suggests market concerns that the Fed’s cautious stance could mean this rate-cutting cycle won’t last long. This uncertainty indicates growing market volatility, making strategies like buying straddles on major indexes a way to profit from significant price shifts in either direction. Create your live VT Markets account and start trading now.

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