In September, building permits in the US increased by 6.4%, a positive change from the previous month’s drop of -3.7%. This indicates a recovery from earlier negative trends. Gold is gaining attention, currently priced above $4,500, and is on track for a 4% weekly rise after the US Nonfarm Payrolls (NFP) report. Even with a stronger US Dollar, gold continues to find support as the market turns risk-averse.

USD Currencies Movement

The USD/CAD pair is gaining strength due to a robust US Dollar, while the Canadian Dollar is impacted by lower oil prices. The USD/JPY remains close to its one-year highs, as markets adjust their expectations for Federal Reserve interest rate cuts. The GBP/USD has declined and is trading below 1.3400, pressured by the US Dollar. It struggles to maintain crucial support levels amid weak nonfarm payrolls. In the cryptocurrency market, Bitcoin is stable at $90,000, but is below its 50-day EMA, indicating a lack of institutional support. Ethereum is holding steady above $3,000, but is also showing weakness due to ETF outflows. XRP continues to face pressure. With strong labor data from December 2025, the market is significantly lowering the chances of a Federal Reserve rate cut in January. This shift is driving a strong rally in the US Dollar. The CME’s FedWatch Tool now shows less than a 15% chance of a cut this month, compared to nearly 50% only weeks ago.

Economic Trends and Projections

The American economy is proving to be resilient, backing the Fed’s cautious approach. The 6.4% rise in building permits from September 2025 now appears to be a sign of renewed economic activity, rather than an outlier. This contrasts with the slowdown in the housing market seen in early 2025, indicating the economy is strong enough for the Fed to keep rates steady. Gold’s rise above $4,500 per ounce highlights ongoing market fears, especially alongside a strengthening dollar. This unusual behavior suggests persistent geopolitical risks and increased purchasing by central banks, a trend that has intensified throughout 2025. Traders may consider this a hedge against risks outside the control of monetary policy. This situation is putting pressure on currencies like the Pound and the Euro. With GBP/USD below 1.3400 and EUR/USD aiming for 1.1600, bearish positions seem attractive. The upcoming US Consumer Price Index (CPI) report is crucial; another high inflation reading, like the 3.4% in December 2025, would likely support the case for no immediate rate cuts and push these currency pairs lower. The “higher for longer” interest rate outlook is also making things tough for riskier assets. This is evident in the cryptocurrency market, where institutional demand is fading. Bitcoin is finding it hard to stay above $90,000, despite a positive start to the year. Ethereum ETF outflows have exceeded $500 million since late 2025, indicating that investors are shifting away from non-yielding assets to the dollar. Create your live VT Markets account and start trading now.

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