In September, new home sales in the United States fell to 0.737 million, down from 0.8 million. This decline reflects changes in the housing market. Gold prices have also dropped below $4,600 because the US Consumer Price Index has cooled, which impacted the US dollar. The Federal Reserve faces more scrutiny after the Department of Justice issued grand jury subpoenas.

Currency Market Dynamics

The USD/CAD pair stayed stable as US disinflation balanced against oil support for the Canadian dollar. Meanwhile, Ethereum saw a return in buying momentum, with net outflows exceeding 100K ETH. XRP has remained above $2.00, although on-chain and derivatives activity have declined. In other financial news, the best brokers for various trading needs in 2026 have been highlighted, focusing on factors like low spreads and high leverage. These market changes indicate ongoing adjustments in the financial landscape, influenced by economic indicators and external pressures. Recent data shows that the American economy is slowing down, with new home sales dropping and inflation figures from last month continuing to cool. Markets now estimate a greater than 70% chance of a Federal Reserve rate cut by the end of the first quarter, a notable change from late 2025. Political pressures add uncertainty to the Fed’s upcoming decisions, making it tricky for traders.

Global Economic Indicators

Despite potential rate cuts, the US Dollar remains surprisingly strong. This is mainly because poor economic data from Europe, especially sluggish Q4 2025 manufacturing PMI numbers, suggests that other central banks may need to cut rates more sharply. We believe that trading options to bet on volatility in currency pairs like EUR/USD and GBP/USD will be a key strategy in the coming weeks. Gold has retreated below $4,600 an ounce, mainly due to the stronger dollar. We saw a similar trend in 2023, where short-term dollar movements could overshadow the bullish outlook for gold, even with anticipated rate cuts. For oil, geopolitical risks are the main driver, so we are monitoring put options to protect against any sudden de-escalation that could lower prices. While lower interest rates are generally positive for stocks, slowing economic growth presents a mixed picture. The CBOE Volatility Index (VIX) has risen to 16.5 from its lows in December 2025, indicating growing nervousness among investors. We believe buying call options on major stock indices makes sense but should come with safeguards in case the economic slowdown is more severe than expected. Create your live VT Markets account and start trading now.

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