In September, the NFIB Business Optimism Index in the United States dropped to 98.8, below the expected 100.5. This reflects growing concerns among small business owners during this time. At the same time, the EUR/USD pair remained steady around 1.1550, as demand for the US Dollar increased. The GBP/USD pair fell to around 1.3250 due to the UK’s unemployment rate rising to 4.8%.

Gold’s Stability and Market Reactions

Gold stayed above $4,100, thanks to safe-haven buying that balanced the stronger US Dollar. Economists are looking forward to Fed Chair Jerome Powell’s upcoming speech for hints about possible changes in policy, with some predicting two more interest rate cuts this year. Tensions in China have made investors more cautious in the markets, indicating that global stocks might struggle. Amundi plans to launch its first Bitcoin exchange-traded product in early 2026, marking a significant step for a top European asset manager. The NFIB Business Optimism Index’s drop to 98.8 shows that small businesses are becoming more wary about the future. Initial jobless claims have also been increasing, recently reaching 235,000, signaling potential trouble for the wider US economy. This situation suggests that buying put options on equity indices, like the S&P 500, could be a wise move for protection in the coming weeks. Markets are now anticipating two additional interest rate cuts from the Federal Reserve this year, making Chair Powell’s speech crucial. Recall that markets reacted sharply when the Fed did not meet low expectations in late 2023, so any uncertainty from Powell could lead to a similar response. Traders might want to consider straddles on major indices for a potential big movement in either direction after his comments.

Global Economic Concerns

Gold’s stability above $4,100, despite a stronger US Dollar, signals significant market unease. The dollar index (DXY) has risen over 2% in three weeks, yet gold remains a key safe haven. This surprising stability indicates that call options on gold and the US Dollar are appealing hedges against increasing geopolitical tensions and economic uncertainty. The economic weakness isn’t just in the US; Europe is facing challenges too. The latest German ZEW Economic Sentiment survey fell to -15.2, the lowest this year, while UK unemployment has risen. This strengthens the case for expecting further declines in EUR/USD and GBP/USD through put options or by selling futures contracts. Create your live VT Markets account and start trading now.

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