India’s M3 money supply rose to 9.9% in November, up from 9.8% before. This increase aligns with positive economic signs in the region. In the global currency markets, the EUR/USD pair gained value, hitting 1.1630 due to expectations about the Federal Reserve. It is likely that the Federal Reserve will announce a 25 basis point interest rate cut, which reflects ongoing changes in fiscal policy.

Trading Movements

In trading, GBP/USD climbed over the 1.3300 mark, supported by selling pressure on the US Dollar. Gold held steady at around $4,200 as markets prepare for potential actions from the Federal Reserve. Cryptocurrency markets showed mixed results. Bitcoin remained above $92,000, while Ethereum had a positive trend. However, XRP struggled and faced downward pressure. Broker choices for 2025 are gaining attention, highlighting various categories for potential traders. These categories include forex, CFD, and region-specific brokers, each with their own advantages and disadvantages. Investors should perform thorough research before participating in the market, given the associated risks. FXStreet stresses the importance of making informed decisions in changing market conditions.

Federal Reserve Impact

The market has already accounted for the expected 25 basis point cut by the Federal Reserve. The real focus now is on the divisive nature of the meeting, which indicates uncertainty about the Fed’s future guidance. This could lead to increased volatility, making options strategies like straddles on the S&P 500 appealing to seize any sharp movements after the announcement. The anticipated rate cut is putting pressure on the US Dollar. This is supporting gains in the EUR/USD and GBP/USD pairs. Notably, the dollar index (DXY) fell over 4% in the last months of 2023 when the market first sensed a policy shift. Those trading derivatives might think about buying call options on currency ETFs like FXE (Euro) to take advantage of a possible further decline in the dollar in the upcoming weeks. With gold stable around $4,200, a dovish Federal Reserve and a weaker dollar create a favorable situation for the metal. This presents an opportunity to utilize gold futures or call options on gold miner ETFs for potential gains. Recent Q3 2025 data shows ongoing central bank buying, which could boost prices as we enter the new year. While lower rates usually benefit stocks, we must understand the reasons behind the cut. The latest November jobs report revealed a slight cool-down in the labor market, with payrolls at 155,000, just below expectations. This suggests being selective, potentially using derivatives to support stable sectors over high-growth tech until the economic outlook becomes clearer. India’s M3 money supply increasing to 9.9% highlights liquidity in a crucial emerging market. A dovish Federal Reserve and a weaker US dollar often help emerging markets by improving financial conditions and attracting capital. We witnessed a similar trend boost emerging market indexes in the first half of 2024, indicating that traders might consider options on ETFs like INDA for investment. Create your live VT Markets account and start trading now.

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