In October, Canada’s wholesale sales rose by 0.1%, beating expectations of a 0.1% decline. This indicates that the market is performing better than predicted. The EUR/USD stayed around 1.1740 as Federal Reserve officials hinted at a pause in interest rate cuts. Meanwhile, GBP/USD dropped to about 1.3360, following disappointing economic data from the UK.

Commodities and Currency Movements

Commodity prices reached record highs, with copper nearing $12,000 and silver hitting $64.3, according to Commerzbank. The Japanese Yen weakened ahead of a policy announcement from the Bank of Japan. Gold prices pushed up against $4,300 per troy ounce, driven by expectations of more interest rate cuts from the Federal Reserve. The S&P 500 continued to rise amidst changing US Treasury yields after a recent rate cut. Litecoin stabilized above $80, but there’s a risk of a long squeeze affecting bullish positions. Aave approached $204, showing signs of a strengthening bullish trend, which could lead to a breakout. FXStreet provides insights into financial markets but recommends thorough research before making investment decisions. The information is not guaranteed to be accurate and does not constitute investment advice.

Upcoming Monetary Policies

The Federal Reserve’s recent rate cut is a focal point, with the market anticipating at least two more cuts by mid-2026. Core inflation remains slightly above 3%, a level noted back in late 2023, suggesting that interest rates may continue to drop. Buying call options on SOFR futures looks like a smart move for those positioning for this anticipated easing cycle. This dovish shift from the Fed is fueling commodity prices, with gold surpassing $4,300 and copper approaching $12,000. This situation is influenced not only by cheaper money but also by ongoing supply issues from major South American producers, which have worsened since 2024. Traders might consider buying call spreads on copper and silver futures to take advantage of this strong momentum while managing risk. In equities, the S&P 500 rally seems poised to extend into the year-end, particularly in non-tech sectors that benefit from lower interest rates. Volatility remains unexpectedly low, with the VIX trading below its historical average of 19, making options cheaper. Buying calls on industrial or financial sector ETFs could yield better returns than the broader index. The British Pound is our main focus in currency trading ahead of the Bank of England meeting on December 18. With two consecutive months of negative GDP—a scenario not seen since 2023—the BoE faces pressure to adopt a more dovish approach. Buying puts on GBP/USD seems like a wise hedge against a dovish surprise from the central bank. Create your live VT Markets account and start trading now.

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