In May, Mexico’s retail sales rose by 1.8% from the previous month, bouncing back from a decline of 1%. This shows a positive change in the country’s retail market. The EUR/USD pair hit new two-week highs at around 1.1760 due to growing selling pressure on the US Dollar. Similarly, GBP/USD surpassed the 1.3500 level, reaching multi-day highs thanks to a weakening Dollar.

Gold Prices Soar

Gold prices climbed above $3,400 per troy ounce, marking five-week peaks. This rise in gold is supported by falling US yields and ongoing trade tensions. In the cryptocurrency market, Bitcoin held above $118,000 after SpaceX transferred over $150 million in BTC. Meanwhile, Ethereum fell towards the $3,600 mark despite continued spot ETF inflows. During the first half of Trump’s second term, markets showed resilience amid chaotic policy changes and “America First” strategies, which focused on trade, tax, artificial intelligence, and national defense. The current pressure on the US Dollar creates clear opportunities for currency traders. The Dollar Index (DXY) recently dropped to around 104.5, reflecting a wider bearish sentiment that favors other major currencies. Therefore, we’re looking into long call options on pairs like EUR/USD and GBP/USD to take advantage of the Dollar’s weakness.

Geopolitical Tensions Impact Gold

Gold’s upward trend is expected to continue, especially as US 10-year Treasury yields remain unstable, recently dipping below 4.5%. Given the ongoing geopolitical tensions, we view gold as a key hedge against market uncertainty. We see value in buying call options on gold futures or related ETFs to benefit from this trend. Mexico’s improved retail performance indicates underlying economic strength, which we expect will support its currency. The central bank has kept its key interest rate at a historically high 11.00%, making the peso attractive for carry trades. As a result, we’re considering put options on the USD/MXN pair, expecting the Mexican currency to appreciate further. In the cryptocurrency market, we notice a clear difference between the two largest assets. Bitcoin’s consolidation, aided by institutional support from firms like SpaceX, suggests strength. In contrast, Ethereum’s decline points to possible further downside. Thus, we are exploring strategies like pairs trading, going long on BTC futures while shorting ETH futures to capture this performance gap. The market’s resilience amid chaotic policy changes under Trump indicates a high potential for sudden price movements. With the CBOE Volatility Index (VIX) sitting near 14, but showing historical spikes above 20 during uncertain times, we expect sharp price shifts from new announcements. Consequently, we’re preparing to profit from this anticipated volatility by buying straddles on major indices. Create your live VT Markets account and start trading now.

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