Consumer confidence in Mexico fell to 44 in November, down from 45.7. This change indicates a shift in how consumers feel about the economy. In other regions, key economic indicators remained stable. The US PCE price index rose by 2.8% in September, and the US consumer sentiment index increased to 53.3 in December. Canada saw an increase in employment in November, which caused the USD/CAD exchange rate to drop to its lowest level in two months. As a result, the Canadian dollar became stronger, putting pressure on the US dollar.

Market Trends In Europe

European market trends showed stability, with EUR/USD trading near 1.1650. Despite some resistance, this pair is on course for a positive close for the week. Traders are cautious about GBP/USD, which is around 1.3350, as they await key US data releases. The general weakness of the US dollar has helped the pair maintain its gains. Gold traded below $4,250, buoyed by expectations of a dovish Federal Reserve. Traders are waiting for the US PCE data before making big moves. Cryptocurrencies had mixed performances. Bitcoin stayed above $91,000, while Ethereum showed positive sentiment ahead of the Federal Reserve meeting. Ripple, however, continued to feel downward pressure, even with inflows into XRP spot ETFs.

Emerging Market Trends

The drop in Mexico’s consumer confidence to 44 mirrors a larger trend across emerging markets as we near the end of 2025. This cautious sentiment is noteworthy, especially since the latest US jobs report for November revealed hiring slowed to 155,000, falling short of expectations. This slowdown hints at a global reduction in economic activity. We are observing a familiar pattern in market expectations regarding central bank policies. Similar to previous cycles that anticipated rate cuts, optimism builds around Fed meetings, often boosting risk appetite. The recent US Personal Consumption Expenditures (PCE) index for October 2025 indicated core inflation at 2.9%. Traders now see a high likelihood of a rate cut in the first quarter of 2026. This situation suggests a weakening US Dollar since lower rates reduce its yield advantage. The Dollar Index (DXY) has dropped nearly 4% in the last six weeks, from over 106 to around 102.5. Traders should consider using options to position for further declines in the dollar against currencies of central banks that may delay cuts. For commodities, this environment supports gold. Lower interest rates lower the cost of holding non-yielding assets, pushing gold towards new yearly highs. In past instances when gold was below $4,250, rallies were often triggered by similar dovish Fed expectations. The crypto markets are also responding to these changing monetary policies. Bitcoin rose above $91,000 due to rate cut hopes. We are noticing increased buying in futures and options contracts for both Bitcoin and Ethereum, as traders prepare for a jump in liquidity in the new year. Given the historical volatility, using derivatives to manage risk could be a smart way to position for this potential upside. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now