Mexico’s Gross Domestic Product (GDP) for the third quarter (3Q) showed a 0.2% contraction compared to last year, which was in line with market expectations. This indicates that the country is still facing economic difficulties. In the currency market, the strength of the US Dollar impacted the AUD/USD and GBP/USD pairs. The GBP/USD exchange rate fell below 1.32 due to the Federal Reserve’s recent actions, while the EUR/USD pair bounced back to 1.1570 after the European Central Bank kept interest rates unchanged.

Gold and Cryptocurrency Overview

Gold has stayed close to the $4,000 mark as trade tensions between the US and China have eased. A meeting between Donald Trump and Xi Jinping resulted in reduced trade barriers, which also helped cryptocurrencies like Bitcoin, Ethereum, and XRP, each gaining about 1%. Zcash, a cryptocurrency focused on privacy, rose to around $360, maintaining a positive trend despite some market fluctuations. This increase reflects a shift in risk sentiment influenced by global financial developments. Finally, FXStreet offers insights on the best forex brokers for 2025, catering to different trading needs such as low spreads, high leverage, and the MT4 platform. They also provide information on brokers in regions like MENA, Latam, and Indonesia.

US Dollar and Global Economic Trends

The US Dollar is likely to remain strong, supported by a hawkish Federal Reserve. With US inflation staying above 3% for most of the past year, the Fed is not expected to soften its stance. This suggests that buying call options on the dollar or put options on pairs like GBP/USD could be a good strategy in the upcoming weeks. Gold faces significant challenges as it struggles to maintain the $4,000 per ounce level. A strong dollar and decreased trade tensions between the US and China are reducing gold’s appeal as a safe haven investment. We’ve seen this pattern before from 2013-2015, when a rising dollar after years of quantitative easing put pressure on precious metals. The recent contraction of -0.2% in Mexico’s GDP for Q3 was anticipated, suggesting that the market has likely already accounted for it. However, with over 80% of Mexico’s exports traditionally heading to the US, the real factor affecting the peso will be the strength of the US economy. A strong US economy could support the peso, while a hawkish Fed usually impacts emerging market currencies negatively. The recent truce in the US-China trade dispute may result in lower implied volatility across major stock indices. The CBOE Volatility Index (VIX) has dropped from its earlier highs this year, indicating that it may be advantageous to sell volatility through strategies like short straddles. We anticipate this trend will continue as long as geopolitical news remains stable. While the European Central Bank seems slightly less worried about downside risks, the EUR/USD pair is still limited by the dollar’s strength. The recent increase to the 1.1570 area appears to be a temporary correction rather than a shift in trend. We expect that any rallies in the euro will be chances to prepare for further dollar gains. Create your live VT Markets account and start trading now.

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