India’s foreign exchange reserves were at $695.49 billion on July 14, down slightly from $696.67 billion. The EUR/USD currency pair dropped below 1.1750 as the US Dollar gained strength, boosted by positive news about US-China relations. Similarly, GBP/USD fell to around 1.3450 due to weak UK Retail Sales data and the strong USD.

Gold and Cryptocurrency Market Trends

Gold continued to drop, hitting a new weekly low below $3,350. This decline is due to improved risk sentiment and rising US T-bond yields. At the same time, popular cryptocurrencies like Bitcoin, Ethereum, and Ripple saw further corrections as bullish momentum faded. The US Federal Reserve is facing criticism for delaying interest rate cuts amid tariff uncertainties, but the strong economy allows them to pause. Various brokers for currency pairs like EUR/USD are being assessed based on their competitive spreads and execution speed. Trading foreign exchange on margin is risky due to leverage, which can lead to significant losses. New traders should think about their investment goals, experience, and risk tolerance. Consulting financial advisors is a good idea if you’re unsure. Views expressed here are those of the authors and do not represent any official position. We believe the US Federal Reserve’s delay in rate cuts is a key focus for derivative traders. Recent US job data shows the unemployment rate steady below 4%, and ongoing core inflation supports a “higher for longer” interest rate situation. This backdrop is likely to maintain US Dollar strength in the upcoming weeks.

Shorting the Euro

With the dollar gaining momentum, we see opportunities in shorting the euro. Recent Purchasing Managers’ Index (PMI) data from the Eurozone, especially in Germany’s manufacturing sector, indicates economic contraction. This creates a clear policy difference with the United States, making derivative strategies that profit from a drop in the EUR/USD pair seem sound. The forecast for precious metals is also impacted by rising US Treasury yields. Typically, as the yield on the 10-year T-bond increases, the cost of holding non-yielding gold rises, and we are currently observing this trend as yields remain high. Any upward movement in gold should be viewed as a chance to take bearish positions. However, this favorable risk sentiment creates a complicated situation for stock indices. While a strong economy benefits corporate earnings, high interest rates pose challenges. We recommend using options strategies, such as buying puts for protection or selling covered calls to generate income from existing stock holdings. In the cryptocurrency market, corrections are likely to persist amidst tighter liquidity. Historical trends show that when central banks cut back on stimulus, speculative assets like digital currencies often struggle. We recommend caution in taking new, aggressive long positions in assets like Bitcoin or Ethereum for the time being. Create your live VT Markets account and start trading now.

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