The U.S. dollar started the week with little change against major currencies. It stayed steady against the euro and yen, while it fell slightly against the pound, down 0.16%. The dollar rose 0.21% against the Australian dollar and 0.33% against the New Zealand dollar. Despite reaching new highs last week, the dollar pulled back a bit as U.S. trading began. Bitcoin began the week with strong energy, reaching a record $123,236, up from Friday’s close of $117,579. This was a rise from below $100,000 in June. This increase reflects a move away from U.S. dollar assets, partly due to worries about fiscal policy. The rise of digital currencies such as Ethereum, now over $3,000, raises concerns about potential money laundering. Bitcoin’s growth mirrors past market trends and speculation about future profits. Gold has also gained from the changing market conditions. President Trump announced new tariffs of 30% on the EU and Mexico to increase U.S. Treasury revenue. He criticized Fed Chair Jerome Powell and suggested he resign. Trump also plans to announce a weapons package for Ukraine, focusing on arms sales. Meanwhile, U.S. stocks showed mixed results, with the Dow, S&P, and NASDAQ all experiencing slight losses. In the early trading this week, the dollar stayed stable. It moved little against the euro and yen, while the pound dipped 0.16%, suggesting a market shift toward safer assets. Gains against the Australian and New Zealand dollars at 0.21% and 0.33%, respectively, indicate solid demand for the dollar overall. However, this strength seemed to ease as U.S. trading picked up, signaling a brief pause after last week’s rapid climb. The dollar’s rise has faced some hesitation as traders process new political and economic developments. Markets usually dislike sudden changes in fiscal policy, and recent announcements from Washington have increased uncertainty. Although the dollar had been gaining strength, that momentum now appears to be slowing. Bitcoin, on the other hand, continued its ups and downs. It rose above $123,000 from Friday’s $117,579 close, bouncing back from June’s dip below $100,000. This rally is closely tied to traders moving away from traditional dollar-based investments, which often happens when confidence in policy weakens. Ethereum crossing the $3,000 mark adds excitement, even as concerns about regulatory issues grow, especially regarding its use in hidden transactions. Gold’s steady rise indicates that investors are shifting towards assets seen as safe during uncertain times. Tariffs are back in the spotlight with announcements from the White House, including a 30% tax on goods from Europe and Mexico. This move, intended to fund government expenses, signals a shift in trade strategy rather than a spirit of cooperation. Powell has faced repeated criticism from Trump, who has urged his resignation due to disagreements over monetary policy. Such public remarks usually draw attention to local bonds and currencies. The President has promised more updates on defense funding, including a large arms package for Ukraine, which could impact geopolitical risk soon. Stock markets are showing caution. The Dow, S&P, and NASDAQ have all lost some ground. Treasury yields remained steady, showing investor caution rather than any significant market changes. In these moments, chasing headlines can lead to missed opportunities. Volatility often increases around policy decisions, especially when financial tools are used aggressively. Price stability usually returns once there’s more clarity; until then, a neutral stance often proves to be more beneficial than trying to guess what will happen next. Currently, we are seeing higher premiums in currency and equity options. Implied volatility suggests that traders are preparing for more price movements, not calm conditions. Calendar spreads are widening as five-day risks reflect not just political announcements but also reactions across different assets. For now, staying consistent in reading macro signals is more important than chasing trends. Trading based on assumptions about policy has not worked well in similar past situations.

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