In September, China’s retail sales grew by 3% compared to last year, beating expectations of 2.9%. This suggests a positive trend in China’s retail sector. At the same time, USD/CAD is trading around 1.4000, even with falling oil prices. The Japanese Yen has also recovered against a weaker US Dollar.

Gold And Currency Impact

Gold prices in Pakistan and India increased, along with the value of the Australian Dollar, thanks to China’s economic growth in the third quarter. The EUR/USD pair is under pressure, sitting near 1.1660 due to France’s credit rating downgrade. In the cryptocurrency market, coins like Mantle, Zcash, and Bittensor have bounced back, nearly recovering past losses. On the other hand, cryptocurrencies such as BNB, Solana, and Cardano dropped over 10%, leading to market liquidations exceeding $1 billion. Looking ahead, FXStreet highlights the importance of careful research before making investments due to the risks involved. This content is for informational purposes only, stressing the need for personal diligence in investment decisions. Although China’s retail sales exceeded expectations by a small margin, we shouldn’t see this as a sign of strong recovery. We’ve seen similar small improvements in 2023 and 2024 that did not lead to significant gains in China-related assets. Thus, making big bets on things like the Australian dollar or copper futures seems too risky at this time.

Market Uncertainty

The upcoming meeting between Trump and Xi is creating a lot of uncertainty in the market, so we should prepare for price fluctuations. The VIX, which measures market fear, has risen to 18.5 this past month, a level we haven’t seen since the trade tensions of 2019. Purchasing VIX call options or puts on major indices like the S&P 500 can provide protection against unexpected news from the summit. In Europe, the downgrade of France’s credit rating is impacting the Euro, which is struggling to stay above 1.1650 against the dollar. This economic strain indicates further potential declines for the currency. We should consider buying put options on Euro FX futures to profit from a potential drop toward the 1.1500 support level. Gold is currently priced at $4,250, serving as a safe haven, but that rise seems stretched. Much of the current geopolitical risk appears to be already reflected in its price, similar to its previous highs in 2023. Using a collar strategy—buying a protective put while selling a covered call against a long gold futures position—might be a smart way to safeguard recent profits. The significant liquidation in the crypto markets is a concerning sign for overall market risk. Historically, such intense selling pressures in speculative assets—like we experienced during the market turbulence of 2022—often signal broader weakness in traditional stock markets. This is a clear indication to review our downside protection and reduce exposure to high-risk assets. Create your live VT Markets account and start trading now.

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