Market Movements

Market movements are influenced by several factors. Demand for safe-haven assets is pushing gold close to $5,000, while mixed economic data in the U.S. keeps the EUR/USD steady at around 1.1750. Additionally, Bitcoin dipped below $90,000 due to Trump’s tariffs causing price fluctuations and ETF outflows. Looking ahead, upcoming meetings by the Fed and BoC, along with ongoing geopolitical tensions, could impact market trends even more. Some financial institutions, like UBS Group, are starting to offer Bitcoin and Ethereum options to select private clients. The U.S. dollar has dropped to a five-week low, showing a clear trend that traders should take advantage of. Implied volatility is increasing ahead of the Federal Reserve meeting, and the VIX index remains stubbornly above 20. Traders might want to consider options strategies, like long straddles, that benefit from big price movements, especially in major pairs like EUR/USD and the dollar index.

Canadian Retail Sales

Strong Canadian retail sales data from November 2025, showing a growth of 1.7%, highlights the economy’s resilience. This stands in stark contrast to the U.S., where cooling inflation data has raised expectations for a Fed rate cut. Given this policy difference, trading the Canadian dollar against the U.S. dollar looks promising, with potential use of futures or call options on CAD. The rise of gold toward $5,000 reflects both a flight to safety and aggressive selling of the U.S. dollar. We saw a similar trend in 2024 when fears of a global slowdown pushed gold up 15% in just one quarter. Traders should consider buying call options with strike prices above $5,000 to take advantage of this strong momentum. The Japanese Yen is also a key focus, especially as officials threaten intervention with each drop in the USD/JPY pair. A “rate check” often acts as a warning before market intervention, potentially causing a sudden drop in this currency pair. Purchasing inexpensive, out-of-the-money put options on USD/JPY is a limited-risk way to profit from such volatile situations. In the meantime, currencies like the British Pound and the Euro are reaching multi-month highs, benefiting from a weakened dollar. This situation is not solely technical; it is supported by fundamentals as Fed funds futures now indicate a greater than 70% chance of a rate cut by March. We can expect the trend of dollar selling to intensify as the Fed decision approaches. Create your live VT Markets account and start trading now.

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