Italy’s trade balance with non-EU countries reached €5.321 billion in October, up from €2.738 billion earlier. This rise shows that Italy’s trade position outside the European Union is improving. In financial markets, the Euro lost value against the Swiss Franc. This was influenced by mixed economic data from the Eurozone. Germany’s annual Consumer Price Index inflation rate stayed at 2.3% in November, which did not significantly impact market movements.

GBP/USD Exchange Rate Changes

The GBP/USD exchange rate dropped to 1.3200, correcting some of its weekly gains as low trading volumes made the market more cautious. Gold remained steady below $4,200 for the week, gaining over 2.5% amid expectations of a Federal Reserve rate cut. In the cryptocurrency market, Bitcoin, Ethereum, and Ripple struggled to maintain their recovery. This followed a sharp market decline, where over $19 billion in crypto assets were sold off in one day, leading to less retail interest. The S&P 500 grew by 13.4%, backed by strong performances in healthcare and technology sectors. However, Zcash fell by 4%, facing risks from increased retail trading in futures and spot markets. Italy’s non-EU trade balance increase to €5.321 billion is a strong positive but happens alongside a nearly stagnant Eurozone economy. With German inflation steady at 2.3% in November, the European Central Bank is cautious about lowering interest rates. This creates a clear difference compared to what’s happening in the United States.

Expectations for Federal Reserve Rate Cuts

In the U.S., markets now anticipate a high chance of a Federal Reserve rate cut in December, supported by recent data. For instance, the U.S. Consumer Price Index for October 2025 dropped to 2.8%, and the latest jobs report indicated growth slowing to 155,000. Both factors support the need for monetary easing, which is weakening the U.S. dollar and boosting other assets. This policy difference makes long EUR/USD positions appealing, particularly as the pair stays above the 1.1600 mark. Traders might want to consider using call options on the EUR/USD to benefit from potential gains if the Fed lowers rates while the ECB remains steady. This strategy allows for participation in a rally while setting a limit on risk. The environment is also very supportive for gold, which is solidifying its gains below $4,200. The potential for a weaker dollar and falling U.S. interest rates is positive for non-yielding assets like precious metals. We could use gold futures or options to maintain long exposure through the upcoming Fed blackout period. This market situation feels similar to late 2023 when expectations of Fed rate cuts led to a major market rally. However, it’s important to remember that the Fed may cut rates because the economy is slowing down. Therefore, it could be wise to protect long equity positions with S&P 500 put options to guard against a potential downturn. Create your live VT Markets account and start trading now.

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