US wholesale inventories fell by 0.3% in May, which was in line with expectations. This decrease may be significant for economic analysts, though it is not intended as investment advice or market recommendations. Bitcoin hit a new record of $111,980 on Wednesday, exceeding its previous high. This marks the third time in 2025 that Bitcoin has reached a new peak, having done so earlier on January 20 and May 22.

AUD/USD Exchange Rate

The AUD/USD exchange rate neared 0.6600, moving past the 0.6500 level. This was noted during ongoing analysis of the Reserve Bank of Australia’s policies and the fluctuating US Dollar. The EUR/USD pair showed little movement near the 1.1700 mark as the market focused on US-EU trade talks. Gold prices rose above $3,300 per troy ounce due to market uncertainties. Despite a stable US Dollar and falling bond yields, gold’s upward trend continued, fueled partly by anticipation of the FOMC Minutes. New US tariffs may affect Asian economies, with some countries possibly benefiting. Most tariffs are higher than expected, except for nations like Singapore, India, and the Philippines, which could see gains in future negotiations.

US Wholesale Inventories

US wholesale inventories slightly decreased by 0.3% in May, which met analysts’ expectations. This likely indicates that businesses are managing their supply chains more carefully due to weak demand and cost-control measures. For traders, this suggests limited momentum for restocking and calls for tempered expectations for retail or industrial growth. It aligns with the overall trend of inventory adjustments following the overstocked conditions after the pandemic. On the other hand, Bitcoin’s surge above $111,980 puts digital assets back in the limelight. This is the third new high this year, suggesting a potential upward trend rather than a speculative push. With Anderson’s reports showing strong institutional flows, the rally seems well-supported. In derivatives, volatility is high, and option premiums have risen. The recent peaks may attract short-term momentum positions, but it’s crucial to manage delta exposure on calls as market movements become sharper. In the foreign exchange market, the Aussie Dollar is experiencing increased sensitivity. The pair’s rise toward 0.6600 reflects changing perceptions of the Reserve Bank of Australia’s interest rate stance, especially after Taylor’s comments introduced more uncertainty about inflation. Additionally, recent softness in the US Dollar before anticipated inflation revisions has played a role. We noted a slight widening of volatility premiums for short-term AUD/USD options, particularly at the upper end, indicating expectations of further weakening in the Dollar. The euro-dollar pair remained steady around 1.1700, with little movement caused by high-level discussions in US-EU trade. There were no significant shifts, but longer-term traders may notice that implied volatility has decreased. This reduction opens opportunities for short strategies in straddle structures, although it will be important to stagger expiries, especially with central bank announcements approaching later this month. Shifting to metals, gold prices rose comfortably above $3,300 per ounce. This growth isn’t solely based on macroeconomic factors anymore. Even with US real yields dropping and the Dollar stable, demand for gold as an alternative asset remains strong. Martinez has pointed out increased buying by central banks and a rise in strategic allocation flows, similar to last quarter. Longer-term gold call options continue to be favored as market expectations of dovish comments from Fed governors remain unchanged ahead of the minutes release. For derivative strategies, setups that prioritize mild convexity over high deltas may be more robust in this environment. US tariff changes have introduced new complexities, especially for Asia-Pacific economies. Countries not impacted by higher tariffs, such as India and Singapore, may attract attention due to shifts in capital flows and sourcing strategies. This is important because the cost volatility for exporters to the US will drive new hedging demand, particularly in forward FX contracts and materials-linked derivatives. Jackson from the trade analytics team acknowledged greater sensitivity in shipping-related commodities, which could lead to increased spread-based trading in futures related to Pacific operations. Traders managing cross-region exposure might find value in export-sensitive equity indices, particularly over quarterly periods. Create your live VT Markets account and start trading now.

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