The EUR/JPY dropped below 1.1600 to about 1.1590 during Asian trading on Thursday. This change happened as the Euro lost value against the Japanese Yen, following new sanctions by the European Union against Russia related to the ongoing conflict in Ukraine. The EU and the US imposed these sanctions due to concerns that Russia is not genuinely trying to resolve the conflict. Meanwhile, we await the Eurozone’s Consumer Confidence data, which adds more pressure on the Euro.

Impact of Economic Policies

The EU’s actions are likely to strengthen the Yen as traders seek safer investments amid economic worries for the Eurozone. At the same time, Japan’s new Prime Minister is planning a stimulus package that could surpass last year’s $92 billion, which might also influence the Yen’s value. Economists predict that around 60% expect the Bank of Japan to raise rates by 25 basis points this quarter. By March, about 96% expect at least a 25 bps increase in borrowing costs, indicating upward trends in rates. The Yen’s value hinges on Japan’s economy, the Bank of Japan’s (BoJ) policies, bond yield differences, and overall market sentiment. The BoJ’s past policies have led to the Yen’s decline, but recent adjustments are providing some support. In times of global market stress, the Yen remains a go-to safe-haven currency. As of today, October 23rd, 2025, the Euro is weakening due to the new sanctions on Russia. This geopolitical tension is driving traders to safer assets and benefiting the Japanese Yen. We’re closely monitoring the Eurozone Consumer Confidence data due later today for signs of further economic slowdown.

Market Sentiment and Strategies

The economic outlook for the Eurozone seems tough, creating headwinds for the Euro. Recent data shows Q3 GDP growth at just 0.1%, while September’s inflation remains high at 3.5%, indicating potential stagflation. These factors contribute to a bearish outlook for the Euro in the coming weeks. In Japan, the decisions from the Bank of Japan will be crucial. After ending its extremely loose monetary policy in 2024, expectations are rising for a rate hike this quarter, which would strengthen the Yen further. Minutes from the BoJ’s September meeting, released last week, showed a growing hawkish sentiment among board members focused on tackling inflation. However, we must also keep in mind the new government’s fiscal plans. Prime Minister Takaichi’s proposed stimulus package may conflict with the central bank’s tightening approach. Japanese 10-year bond yields are already rising to 1.15%, as the market reacts to the possibility of increased government spending and debt. For derivative traders, this environment suggests that buying put options on EUR/JPY could be a smart strategy. This allows traders to take advantage of potential downturns in the currency pair, while limiting losses if Japan’s stimulus unexpectedly weakens the Yen. Given the clear downward trend, this provides a controlled way to capitalize on the ongoing market tension. Create your live VT Markets account and start trading now.

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Gold prices in India fell on Thursday. The cost per gram dropped to 11,541.37 Indian Rupees (INR), down from 11,580.38 INR the day before. The price per tola also declined, going from INR 135,066.80 to INR 134,673.20. In response to China’s limits on rare earth exports, the US government is considering a plan to restrict software-powered exports to China. This news comes during a US government shutdown that has now lasted four weeks, with the Senate set to vote on a funding bill that is expected to fail.

Gold’s Performance in 2025

Gold has risen more than 50% in 2025. This increase surpasses gains made during the 2008 financial crisis and the Covid-19 pandemic. Although there has been some profit-taking recently, gold is still up about 55% this year. The Fed funds futures show a 97% chance of a 25 basis point rate cut. FXStreet updates Indian gold prices by converting international USD rates to the local currency, which may differ slightly from market rates. Gold is often seen as a safe-haven asset and a hedge against inflation. Central banks around the world, especially in emerging economies, are buying significant amounts of gold to strengthen their economies. The recent slight decline in gold prices should not be viewed as weakness; it’s more likely due to profit-taking. The metal is still enjoying a remarkable 55% rise in 2025, which could indicate a consolidation phase. The long-term upward trend appears solid for now. The ongoing U.S. government shutdown, which is now in its fourth week, contributes to instability, making gold more appealing. As it nears the record 35-day shutdown from 2018-2019, political uncertainty is pushing investors toward safe-haven assets. This domestic uncertainty in the world’s largest economy lends support to gold.

Federal Reserve and Geopolitical Influence

There is almost certainty about interest rate cuts from the Federal Reserve, with markets predicting a 97% chance of this happening. Recent economic data, including a report showing U.S. job growth slowed to just 95,000 in September, backs this expectation. Lower rates increase the allure of non-yielding gold, making it a more attractive investment. Geopolitical tensions between the U.S. and China also bolster gold prices, despite a possible upcoming meeting. The consideration of new U.S. export restrictions as a reaction to China’s rare earth limits creates uncertainty that benefits gold. This ongoing conflict is likely to keep a baseline level of risk embedded in the market. Institutional demand for gold is still very strong. After record purchases in prior years, recent data from the World Gold Council shows that central banks added another 250 tonnes to their reserves in Q3 2025. This ongoing buying from major financial institutions provides robust support for gold prices. As a result, derivative traders might see this current dip in price as a buying opportunity. We suggest considering options strategies like buying call options or establishing bull call spreads. These methods can help you participate in potential gains while managing risk in today’s volatile market. Create your live VT Markets account and start trading now.

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The Australian Dollar is struggling, trading at about 0.6490 against the US Dollar. This drop is linked to the growing chance of a rate cut by the Reserve Bank of Australia (RBA). Recent employment reports revealed that the jobless rate has risen to its highest in almost four years. The odds of a 25-basis-point cut have jumped to 70%, up from 40%, in just one week. Investors are eagerly watching economic indicators for hints about future monetary policy. On the other hand, the US Dollar is gaining strength, boosted by President Trump’s expectations for agreements with China’s Xi Jinping. The US Dollar Index is close to 99.00, benefiting from positive market feelings. However, the extended US government shutdown, now in its fourth week, creates uncertainty around upcoming economic data releases, including Nonfarm Payrolls. A Reuters poll shows a strong expectation for a 25-basis-point interest rate cut from the Federal Reserve this month, with nearly a 97% chance of this happening in October. Meanwhile, the People’s Bank of China has kept its Loan Prime Rates steady, and recent GDP growth figures slightly exceeded expectations, with Retail Sales and Industrial Production showing better-than-expected results.

Reserve Bank Of Australia Rate Cut Likelihood

With a high chance of a rate cut from the Reserve Bank of Australia, we can expect the Australian dollar to weaken further. Recent labor force data from the Australian Bureau of Statistics confirmed a jump in unemployment to a four-year high, increasing market expectations for a November RBA cut to over 70%, according to the ASX 30 Day Interbank Cash Rate Futures tracker. This pressure suggests that any strength in the AUD will be short-lived. Positive news, such as the critical minerals agreement between the US and Australia and stable data from China, is providing some support for the currency but is not enough to change the downward trend. China’s Q3 GDP growth of 4.8% shows a slowdown from the previous quarter, which dampens enthusiasm despite recent gains in industrial production. Right now, these factors seem to prevent a full collapse rather than indicate a recovery. The strength of the US Dollar is also complicated by the Federal Reserve’s cautious approach, with the CME FedWatch Tool showing a 97% chance of a rate cut on October 29. This is backed by recent data, like the ISM Manufacturing PMI for September, which further fell into contraction territory at 48.5. This makes the AUD/USD trade a story of relative weakness, where the RBA is seen as more likely to take decisive action than the Fed.

Options Trading Strategy

For traders using options, the heightened uncertainty ahead of next week’s Australian Q3 CPI and the Fed meeting suggests that buying AUD/USD put options is a wise choice. This strategy allows for profit if the price drops towards the 0.6400 level while limiting potential losses. If the CPI data is softer than expected, it could further deepen the decline of the Aussie. From a technical perspective, the pair remains in a clear downward trend. Any rise towards the 0.6500-0.6540 resistance zone could be a good opportunity to open short positions. There has been significant buying interest near the 0.6400 level in the past, making it a logical point for taking profits on bearish trades. If the price breaks decisively below this level, it could lead to fresh five-month lows. Create your live VT Markets account and start trading now.

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Gold as a Safe Haven

Gold has long been seen as a reliable store of value and a means of exchange. People turn to it as a safe-haven asset during uncertain times. It also acts as protection against inflation and the decline of currency value. Central banks hold the most gold, adding 1,136 tonnes in 2022 alone. These banks diversify their reserves to enhance the perception of economic strength, with significant additions from China, India, and Turkey. Gold’s value often moves opposite to the US Dollar and US Treasuries. During economic instability or when interest rates are low, gold prices usually rise. When the dollar weakens, gold tends to get more expensive; conversely, a strong dollar can lower its price. Today, October 23, 2025, gold prices have dipped slightly. This change reflects the relationship between gold and a stronger US dollar. Recent statements from the US Federal Reserve about keeping interest rates steady have boosted the dollar, making gold more costly in other currencies. This dip might be a good opportunity for traders looking ahead to potential market volatility.

Gold Market Strategy

Gold doesn’t earn interest, so its appeal decreases when rates are high—a trend we saw from 2022 to 2024. This past week, US Treasury yields rose to 4.3%, attracting investment away from precious metals. Traders should keep a close eye on these yields; if they seem to peak, it could signal a turnaround for gold. Still, strong demand from central banks keeps gold prices supported. After the record purchases in 2022, central banks in emerging markets have added over 750 tonnes to their reserves in 2025 so far. This ongoing buying hints that major global players believe in gold’s long-term value and are protecting against currency decline. The current dip in prices is also tied to a brief easing of geopolitical tensions after recent diplomatic discussions. However, this stability can quickly change, and any new conflict could lead investors back to gold. Historical market reactions to global crises show how rapidly gold can rise in value during turbulent times. Given the challenges from a strong dollar but solid long-term support, traders may think about buying long-dated call options. This approach allows them to benefit from a future price increase due to a change in Fed policy or a geopolitical event while limiting potential losses in today’s high-interest environment. The slight price drop makes these options more attractive. Create your live VT Markets account and start trading now.

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Gold prices are falling as investors take profits and the demand for the US Dollar rises. Ongoing geopolitical tensions are also impacting both gold and currency trading.

Expanding Into Digital Assets

T. Rowe Price is launching a new actively managed Exchange Traded Fund (ETF) that will focus on various digital currencies. This move comes as regulations are slowing down due to the US government shutdown. The Pi Network token is holding steady above $0.2000 and is approaching an important technical pattern on the chart. Traders are watching on-chain data closely for any signs of a breakout. In 2025, we’re compiling a list of the best brokers for different trading needs. Key factors include low spreads, regulation, leverage, and platform features. This information aims to help traders make better decisions. The US Dollar Index is climbing towards 99.00, putting pressure on pairs like EUR/USD, which is struggling around 1.1600. In late 2024, a similar dollar strength led to a sharp market drop, so caution is advised. This scenario suggests considering call options on the dollar or put options on the Euro in the coming weeks.

Impact Of The US Government Shutdown

The current US government shutdown is creating a data blackout, leading to uncertainty in the market. During the 2018-2019 shutdown, volatility (measured by the VIX) spiked nearly 15% over three weeks, as traders had limited information. This situation favors strategies such as long straddles on major indices, which profit from big price swings once inflation data is finally released. Recent US sanctions on Russian energy companies Rosneft and Lukoil represent a major geopolitical event likely to affect oil prices. Brent crude futures jumped over 4% to nearly $95 a barrel in just one day, highlighting immediate supply concerns. Derivative traders should watch for inflationary effects and might consider buying call options on oil futures to protect against rising prices. Gold is experiencing a tug-of-war, remaining above $4,000 due to safe-haven demand from geopolitical risks but facing pressure from a strong US dollar. This indicates that market fears are currently outweighing the usual inverse relationship between gold and the dollar. A covered call strategy could be beneficial, allowing traders to earn premium income while retaining the asset for potential gains from major risk events. While Dutch consumer confidence has shown a slight improvement to -27, it is still deeply negative and less significant compared to the overall global risk-off sentiment. The European Central Bank’s outlook from September 2025 already predicted nearly zero GDP growth for the fourth quarter, making it unlikely that this single data point will change the Euro’s weakness against the dollar. Create your live VT Markets account and start trading now.

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### USD/JPY Market Dynamics The USD/JPY pair faces risks due to a prolonged US government shutdown, which may impact economic data. Markets are expecting high chances of Federal Reserve rate cuts in October and December, adding to the uncertainty in financial markets. The Japanese Yen, regarded as a safe-haven currency, is influenced by Bank of Japan (BoJ) policies, Japan’s economic performance, and the difference in bond yields between the US and Japan. Changes in market sentiment during volatile times can strengthen the Yen. This information comes from FXStreet, which advises caution and encourages personal research before making investment decisions. The data shared is for informational purposes and offers a snapshot of current market trends. ### Current Market Overview As of October 23, 2025, the USD/JPY stands firm near 152.50. This stability arises from a clear policy divide between Japan and the United States. Japan is leaning toward more stimulus under new leadership, keeping the Yen weaker. Traders are closely monitoring this trend. Prime Minister Takaichi is expected to advocate for significant fiscal spending, potentially exceeding the JPY 13.9 trillion package from 2024. The Bank of Japan is likely to maintain steady interest rates in the near future, with the market only cautiously considering a rate hike for January. This short-term inaction from the central bank adds pressure on the Yen. In contrast, the United States is adopting a more dovish stance. The market has almost completely accounted for a rate cut this month and another in December, responding to weaker economic data from earlier this year. The ongoing government shutdown is complicating the economic outlook by delaying key information, further weakening the dollar. The interest rate differential continues to be the main factor supporting a higher USD/JPY. Despite expected Fed cuts, the US 10-year Treasury yield remains above 4.1%, while the Japanese Government Bond yield stays below 1.2%. This nearly 300 basis point gap makes holding US dollars much more profitable compared to holding Japanese Yen. Given these conditions, buying call options on USD/JPY could be a smart move in the coming weeks. This strategy lets traders benefit from potential gains toward the 155.00 level, while minimizing downside risk if the US dollar weakens rapidly. The cost of the option represents the maximum potential loss. For a more cautious approach, a bull call spread could be beneficial. By buying a call option at a lower strike price and selling another call at a higher strike price, traders can lower their initial investment. This strategy is likely to be profitable if USD/JPY continues to rise gradually but may not perform as well in case of an unexpected surge. Create your live VT Markets account and start trading now.

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Silver prices are currently at about $48.70 per troy ounce during Asian trading hours. This increase is due to a rise in demand for safe investments ahead of the US inflation data set to release on Friday. Concerns about a US government shutdown are also causing delays in important economic updates. The possibility of the Federal Reserve cutting interest rates to between 3.75% and 4.00% further supports silver, which doesn’t earn interest. A Reuters poll reveals that 115 out of 117 economists predict a 25 basis-point cut in October. Additionally, 83 economists anticipate more cuts later this year. Recently, silver dropped from its previous high of $54.86, influenced by improving market sentiment related to a potential US-China trade deal. President Trump is scheduled to meet with President Xi Jinping, focusing on major trade and geopolitical issues. Silver is a valuable asset for diversification and protection against inflation. Factors like geopolitical tensions, interest rates, and the strength of the US Dollar can affect its price. Silver’s industrial demand in fields such as electronics and solar energy also impacts its value. It usually follows gold’s price changes, and the Gold/Silver ratio can provide insights into their relative valuations. With silver pulling back from its recent high of $54.86, we are now observing a key pause around the $48.70 mark. This moment of hesitation stems from demand for safe investments ahead of important inflation data, creating a tense trading environment. The coming weeks will likely reveal how the market responds to this news. The Federal Reserve’s meeting on October 29th is a major upcoming event for silver prices. Current market expectations, as shown by the CME FedWatch Tool, indicate a 92% chance of a 25-basis-point rate cut, which would be positive for silver. Traders should prepare for the volatility this announcement may create, as unexpected news could lead to sharp price changes. The US inflation data set to be released tomorrow is also crucial, especially after the September CPI report, which came in at 3.8%, slightly higher than expected. A strong inflation report could make the Fed more reluctant to lower rates, which would pose challenges for silver prices. This uncertainty makes holding unprotected positions risky. Due to the expected market shifts, option strategies are advisable. A long straddle—where both a call and a put option are purchased at the same strike price and expiration—could be a smart way to trade the upcoming economic news. This strategy would benefit from significant price movements in either direction without betting on a specific outcome. It’s important to recognize silver’s robust industrial demand, which adds fundamental support. Recent data from Q3 of 2025 showed a 22% increase in global electric vehicle sales year-over-year, a sector that uses a lot of silver. This strong demand can help stabilize prices even if safe-haven interest temporarily decreases. The Gold-to-Silver ratio is currently on the low side at about 50-to-1, compared to the 21st-century average of around 68-to-1. This suggests that silver may be somewhat overvalued relative to gold right now, which could limit further gains. Traders should keep an eye on this ratio; a rise could indicate a move away from silver and towards gold. Finally, geopolitical factors could quickly revive interest in silver as a safe investment. Any negative news from US-China trade talks or effects from the ongoing US government shutdown could push silver prices back toward their highs. Keeping some exposure to potential upside through call options or bull call spreads seems like a wise choice.

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The DAX Index is approaching the end of a cycle that started at its low in April 2025, currently forming wave (5). After hitting a low on June 19, wave (5) has taken shape in an ending diagonal pattern according to Elliott Wave theory. It peaked in wave 1 at 24639.1 and then pulled back to 23284.67 in wave 2. Subsequently, the Index rallied in wave 3, which included several smaller waves. It began at 23785.24, briefly dropped to 23383.84, rose to 24524.11, retracted to 24269.94, and ended at 24771.34. Wave 4 exhibited a double zigzag pattern, with ups and downs, reaching a low of 23682.73.

Market Trends and Wave 5

Wave 5 has started climbing from this low, hitting 24384.24. A pullback, labeled wave ((ii)), is expected after the low on October 17. This correction could support further upward movement. The key level to watch is 23682.73, as it should attract buyers based on swing counts. An update from the Elliott Wave chart on October 23, 2025, was shared, but no specific buying or selling advice was given. All market information carries risks, and readers should do their own research before making investment choices. The DAX seems to be in the final phase of an upward cycle that began in April 2025, showing signs of an ending diagonal pattern, which indicates the trend is running out of steam. Be prepared for a major reversal after one last push for new highs. A small pullback is anticipated soon before the index makes its final climb. This dip may provide a short-term opportunity for bullish positions, but keep an eye on the key pivot at 23682.73. As long as the index stays above this level, one more rally is likely.

Economic Indicators and Their Impact

Recent economic data is boosting market optimism, notably the German IFO Business Climate index, which unexpectedly rose to 92.5. With Eurozone inflation cooling to 2.1% last month, many expect the ECB to hint at a rate cut from the current 3.5% level in early 2026. This positive sentiment is helping fuel the last leg of this rally. Ending diagonal patterns often precede sharp reversals, so it’s wise to safeguard profits on long positions as the market rises. We have seen similar patterns before significant downturns in past cycles. Therefore, developing a bearish strategy, like purchasing put options a few months out, should be prioritized once this last rally shows signs of slowing. Currently, the VDAX-NEW volatility index is low at around 18, meaning option prices are not overly high. This creates an opportunity to position for the expected downturn at a reasonable cost. The plan is to wait for confirmation that the final high has been reached before making significant short trades. Create your live VT Markets account and start trading now.

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The US is considering new restrictions on exports of software-controlled items to China, including laptops and jet engines. This move is seen as a response to China’s recent limits on rare earth exports.

Market Impact of Trade Restrictions

US Treasury Secretary Scott Bessent mentioned that any actions would likely happen alongside G-7 allies. Currently, the AUD/USD has dipped by 0.08%, sitting at 0.6480. A “trade war” is an economic struggle marked by high protectionism, often involving tariffs and countermeasures, which raise import costs and living expenses. The US-China trade war started in 2018 when the US enacted trade barriers against China, claiming unfair practices and theft of intellectual property. China retaliated with tariffs, escalating tensions until a Phase One trade deal in 2020 aimed at reforming China’s trade practices, but this was overshadowed by the pandemic. With Donald Trump winning re-election in 2025 and suggesting 60% tariffs on China, trade tensions are set to rise. This could disrupt global supply chains, lower investment, and affect consumer prices. Lallalit Srijandorn, a digital entrepreneur based in Paris and originally from France, wrote this article.

Hedging Strategies in a Volatile Market

The White House’s indication of new export limits on software is causing significant market uncertainty, indicating a risk-off environment may be on the horizon. We should brace for increased volatility, making VIX call options or futures smart hedges against this political risk. For example, the VIX spiked over 40% in May 2019 during a similar trade conflict, highlighting how quickly market sentiment can change. The Australian dollar’s quick drop to 0.6480 shows its sensitivity to China’s economy, our largest trading partner. With over 30% of Australia’s exports usually going to China, shorting the AUD/USD through futures or buying put options is a direct response to these renewed tensions. We should also keep an eye on the offshore yuan (USD/CNH), as pressure could push it back towards the 7.40 level seen earlier this year. US technology stocks are likely to face challenges, so we should think about purchasing put options on the NASDAQ 100 index or semiconductor ETFs. Many major US tech companies get around 20% of their total revenue from China, making them vulnerable to both US restrictions and Chinese counteractions. This opens doors for pair trades, like shorting the Hang Seng Tech Index while holding long positions in US industrial sectors less affected. Concerns about a global slowdown are likely to hit industrial commodities, making shorting copper futures a smart strategy. We must also consider the agricultural consequences from the last trade war; in 2018, US soybean exports to China plummeted over 70% due to retaliatory tariffs. Traders should monitor soybean prices closely, as China might turn back to suppliers like Brazil. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) is stabilizing around 99.00, thanks to hopes for a trade agreement between the US and China. President Trump expects to make various deals with Chinese President Xi Jinping, possibly including discussions on soybean exports and nuclear arms. At the same time, the Trump administration is thinking about limiting exports to China that rely on US software, ranging from laptops to jet engines. This response is due to China’s restrictions on rare earth exports. Such geopolitical issues can affect currency values and trade ties.

Federal Reserve Rate Expectations

A recent Reuters poll indicates that 115 out of 117 economists expect the Federal Reserve to cut rates by 25 basis points in October. The market predicts a 97% chance of a Fed rate cut, with a 96% likelihood of another cut in December, according to the CME FedWatch Tool. The US Dollar remains crucial in global finance. It became the world’s reserve currency after World War II and is vital for transactions totaling $6.6 trillion daily. The Federal Reserve affects its value through monetary policy, which influences inflation and unemployment. Quantitative easing (QE) usually weakens the dollar, while quantitative tightening (QT) tends to strengthen it. We’ve seen similar situations before, where mixed headlines led to unstable markets. Previously, when the US Dollar Index was around 99, it fluctuated based on rumors of a US-China trade deal one day and threats of export limits the next. This pattern highlighted the dollar’s sensitivity to monetary policy and geopolitical news. As of October 23, 2025, the landscape has changed, but some patterns remain. The US Dollar Index is stronger now, trading around 106.50, boosted by the Federal Reserve’s rate hikes that peaked in 2024. Yet, with September’s CPI data showing core inflation steady at 3.1%, the Fed is keeping rates steady, leading to uncertainty for future decisions. Current market sentiments reflect the past, with expectations for rate cuts almost certain. Although the Fed’s official stance is still hawkish, the CME FedWatch Tool now shows a 75% probability of the first rate cut by March 2026. This difference between the Fed’s communication and market expectations may lead to volatility for the dollar.

Global Supply Chain Realignment

The primary driver is no longer just a trade deal but a wider realignment of global supply chains. There is an ongoing trend to “de-risk” from China, as US companies are investing more in manufacturing in Mexico and Vietnam. Any news that speeds up or complicates this process could prompt sudden moves in the dollar, similar to past meetings between Trump and Xi. For traders in derivatives, this environment makes straightforward bets on the dollar risky. Instead, it might be wiser to pursue strategies that benefit from increased volatility, such as buying straddles or strangles on major currency pairs like EUR/USD. With the VIX index above 18, the market anticipates more fluctuations, allowing options to capture substantial price changes either way. It’s also important to note that the Fed is still engaged in quantitative tightening, as it lets bonds mature from its balance sheet each month. This reduces liquidity and helps support a stronger dollar. This tightening contrasts with the market’s rising expectation for rate cuts, creating an interesting dynamic that could lead to trading opportunities in the upcoming weeks. Create your live VT Markets account and start trading now.

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