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In July, South Africa’s net gold and foreign exchange reserves fell to $65.143 billion from $65.216 billion.
South Africa’s net gold and foreign exchange reserves were $65.143 billion in July, down slightly from $65.216 billion earlier. The foreign exchange market is risky due to leverage, which can result in large losses.
The GBP/USD is approaching 1.3400 as traders expect the Bank of England to cut interest rates. At the same time, the EUR/USD has risen above 1.1650, buoyed by a declining US Dollar amid speculation about rate cuts.
Preparations underway for a summit between Trump and Putin to discuss ceasefire.
Russia has announced that preparations for a summit between Donald Trump and Vladimir Putin are in progress. The meeting might happen in the “coming days.” The location has been decided but is not yet revealed.
The meeting has been tentatively planned after a suggestion from the U.S. Its main goal is to encourage discussions about a ceasefire. Ukrainian President Volodymyr Zelensky is also in talks with Germany, France, and Italy to decide on future actions.
U.S.-Russia Presidential Summit
This meeting would be the first between a U.S. president and Putin since June 2021. Additionally, Putin and Zelensky have not met face-to-face since December 2019. With the news of a possible summit, we may see a decrease in market volatility. The CBOE Volatility Index, or VIX, has been around 15 but could drop as geopolitical tensions ease. Traders might consider selling VIX futures, which is a shift from the defensive strategies used when the VIX rose above 35 after the 2022 invasion. This reduction in tension could positively impact equity markets, especially in Europe. We might see Germany’s DAX index rise, making it a good time to buy call options if the talks progress. This shift could reverse the risk aversion that caused global stocks to decline in early 2022. Energy markets are another key area to watch, particularly crude oil. A credible path to peace would lessen supply disruption concerns, likely lowering Brent crude prices from its recent $85 per barrel. Traders may start buying put options, betting on a price drop back to the mid-$70s, which is far below the $120+ highs seen during the peak of the conflict.Impact on Commodities and Currency Markets
European natural gas prices are very responsive to this news. A successful ceasefire would stabilize supply lines before winter, which could lead to a sharp drop in Dutch TTF gas futures. Many recall the energy crisis of August 2022 when prices soared above €300 per megawatt-hour. Agricultural commodities are also likely to react. Since Ukraine is a key grain supplier, any movement toward peace would improve export flows through the Black Sea, likely causing wheat prices to fall. Shorting wheat futures could be a smart strategy, given that prices previously soared above $12 a bushel in the early months of the war. In currency markets, this news is positive for the Euro. Reduced risks in Europe make the EUR more appealing compared to the safe-haven U.S. Dollar. We could see the EUR/USD pair rise above its recent resistance as traders factor in a more stable economic outlook for Europe. Create your live VT Markets account and start trading now.The USD weakened from dovish Fed comments, while AUD/USD rallied as market rate expectations shifted.
The AUD/USD pair is rising as the US dollar weakens. This weakness follows comments from Fed’s Kashkari, who hinted at a possible rate cut in September due to disappointing US job data. Before the non-farm payroll report, the market expected stronger results, leading to a new rate cut prediction of 60 basis points by year-end, up from 35 basis points. If the economy continues to show soft data, Fed Chair Powell may consider cutting rates.
In another update, the ISM Services PMI reached a new high, and upcoming US jobless claims could change the view on the labor market’s strength. Weak jobless claims could further pressure the dollar. Australia’s inflation report also eased, indicating that the Reserve Bank of Australia may move forward with expected rate cuts.
Technical Analysis
The AUD/USD has been rising since the weak NFP data. On the daily chart, it is trading between crucial levels, with more details available from shorter time frames. The 4-hour chart shows a break above minor support, boosting the rally with bullish momentum. A pullback might lead buyers to rely on the upward trendline for continued gains, while sellers are watching for a break lower to target support. The 1-hour chart indicates the price is near the upper daily range, suggesting possible pullbacks aligned with risk management strategies. In the current situation, the weakening US dollar is the main focus. Last Friday’s Non-Farm Payrolls report from August 1st, 2025, was softer than expected, with around 170,000 jobs added, significantly changing Fed expectations. The market now reflects a greater than 70% chance of a rate cut in September, according to tools like CME FedWatch. However, we need to stay alert for conflicting signals that could bring volatility. Today’s jobless claims data reported a robust labor market, with claims at 215,000, which was below expectations. This kind of data, along with high prices in recent service sector reports, adds uncertainty and may slow the dollar’s decline. The mix of dovish Federal Reserve comments and certain economic strengths indicates that implied volatility in AUD/USD options might be undervalued. If the market is too relaxed about a straightforward dollar decline, any surprises could lead to increased volatility. We should consider strategies that can take advantage of rising volatility.Trading Strategies
For traders anticipating the upward trend to continue, the technical outlook suggests aiming for the 0.6600 level. One straightforward approach is to buy AUD/USD call options that expire in late September. This can capture potential momentum from the Jackson Hole Symposium and the Fed meeting, providing a clear way to profit if the rally continues as expected. Conversely, we must also prepare for a potential reversal if the dollar finds support. The technical analysis points to the trendline and the 0.6485 level as critical areas to monitor. If the price breaks below this support, it could quickly dip back to the 0.6350 zone, making protective put options a wise hedge for long positions. Historically, a similar pattern occurred in 2019 when the Fed shifted from increasing rates to cutting them, resulting in notable dollar weakness. This historical context supports the idea that the dollar’s most probable direction is lower for now, suggesting that selling dollar strength rather than buying dollar dips has a higher probability of success. On the Australian side, the recent quarterly inflation report showing a drop to 3.8% gives the Reserve Bank of Australia a solid reason to cut rates. This could limit the AUD/USD rally as we near the 0.6600 resistance. Selling out-of-the-money call spreads might be a useful strategy to generate income if we believe the pair will face challenges breaking higher. Create your live VT Markets account and start trading now.Germany’s trade balance falls to €14.9 billion in June, below expected €17.3 billion
Germany’s trade balance for June was €14.9 billion, falling short of the expected €17.3 billion. This indicates a drop in Germany’s trade surplus compared to earlier forecasts.
In the UK, the GBP/USD rate is nearing 1.3400 ahead of the Bank of England’s policy announcements. Many expect the Bank to cut interest rates from 4.25% to 4.0%.
The EUR/USD pair has seen slight increases, staying above 1.1650 due to ongoing weakness in the US Dollar. Predictions of rate cuts in the US, along with worries about tariffs and Federal Reserve independence, are impacting the dollar’s strength.
Gold has retained its gains, trading under $3,400 as a safe-haven asset amid new tariff threats from US President Donald Trump. This has boosted demand for gold, although risk appetite has limited further increases.
The US economic outlook is uncertain due to changing trade policies, with expectations for slower growth. While volatility is expected to continue, the most drastic trade fluctuations may have already happened.
Looking back to 2019, we see familiar themes of economic uncertainty. On August 7th, 2025, these themes continue, highlighting the importance of recent data from Germany.
Germany shows ongoing weakness, as the latest industrial production figures for July 2025 show a surprising 0.5% contraction, reported by Destatis. This mirrors disappointing trade balance figures from previous years and indicates issues for the Eurozone. We should consider buying put options on the Euro Stoxx 50 index to protect against a potential downturn in European stocks.
In the UK, the situation differs from past expectations of rate cuts. The Bank of England kept its key interest rate at 5.0% in today’s meeting, but the vote was tight at 5-4, showing clear division about future direction. This creates volatility for the pound, suggesting we could use straddle or strangle options on GBP/USD for potential profits from significant price swings in either direction.
The EUR/USD pair is being influenced by diverging central bank policies and trades near 1.1800. With US inflation for July 2025 cooling to 2.8%, markets are anticipating another Federal Reserve rate cut in September, which further weakens the dollar. We think buying call options on the EUR/USD is a smart way to capitalize on this trend.
Gold remains an essential hedge, though its drivers have changed since the Trump administration’s specific tariff threats. The VIX index is elevated around 19, and ongoing geopolitical tensions are supporting gold above $2,450 per ounce. Holding long positions in gold futures or call options may protect portfolios from unexpected market shifts.
Overall US economic data suggests a slowdown, creating challenges for risk assets. While the severe trade policy changes of the late 2010s have passed, the divergence in central bank policies is now the main source of market volatility. We should use derivatives to manage our risk and stay prepared for abrupt, policy-driven changes.
Germany’s industrial production fell by 1.9% in June, missing the expected decrease of 0.5%
Germany’s industrial production dropped by 1.9% in June, which was worse than the expected decline of 0.5%. This signals a decrease in industrial output, which goes against earlier predictions.
The GBP/USD exchange rate is nearing 1.3400 as the market waits for news from the Bank of England. The pound is rising due to possible interest rate changes, while the dollar is affected by US labor statistics and policy speeches.
The EUR/USD pair made small gains and stayed above 1.1650, thanks to continued weakness in the US dollar. This situation is driven by speculation about rate cuts and ongoing trade tensions, although German industrial and trade reports had limited influence.
Gold prices showed slight increases during the Asian session but remained below $3,400. Concerns about trade, particularly new tariffs proposed by the US President, have increased gold’s appeal as a safe investment.
Many expect the Bank of England to lower interest rates to 4.0% due to rising inflation. Most members of the Monetary Policy Committee seem supportive of this change, which marks a shift from their previous positions.
US trade issues have caused significant volatility this year, with economic growth expected to slow down. However, major disruptions related to trade might have peaked, leading toward a more stable economic situation.
This week’s data reveals serious weakness in the German economy. The 1.9% decline in industrial production is worse than anticipated, reminiscent of sharp declines in late 2023, which led to economic stagnation. This could create negative pressure on European stocks, suggesting that strategies like buying puts or short futures against the German DAX index might be wise.
The British pound is nearing an important level of 1.3400 against the dollar. With expectations for the Bank of England to cut interest rates to 4.0%, this could apply downward pressure on the pound, despite its recent strength. We should consider rallies toward 1.3400 as chances to take bearish positions, such as buying GBP/USD put options.
While the EUR/USD has temporary support from a weaker US dollar, the troubling German industrial data cannot be ignored. The strength above 1.1650 seems fragile and might not hold as the market absorbs the effects of a slowing Eurozone economy. This sets up a potential chance to short the euro, betting that the euro’s fundamental weaknesses will outlast the dollar’s current weakness.
Gold is still a vital asset for us, even as it struggles to rise above $3,400. The mix of new US trade tariff threats and central banks’ dovish approaches creates a favorable setting, similar to conditions in 2024 that previously pushed gold prices to record highs above $2,400 an ounce. We should keep a bullish perspective and consider using call options to benefit from potential price increases due to escalating trade disputes or confirmed rate cuts.
Overall market uncertainty seems to be increasing, fueled by slowing global growth and changing policies from major central banks. We remember that during past periods of economic stress, like the trade tensions of 2019, the VIX volatility index remained above 20 for an extended time. Given the current situation, buying VIX call options could be a smart hedge against potential market turbulence in the coming weeks.
China’s gold reserves rise for ninth straight month, hitting 73.96 million ounces and increasing in value
China’s central bank is steadily increasing its gold reserves, achieving growth for the ninth month in a row. By the end of July, China held 73.96 million ounces of gold, up from 73.90 million ounces in June.
In monetary terms, these reserves are now valued at $243.99 billion, an increase from $242.93 billion the previous month. This strong demand for gold has helped raise its prices since last year.
China’s Gold Acquisition
Since April, confidence in the dollar has been declining due to inconsistent U.S. policies, which is having an impact on the market. China’s consistent gold purchases are a clear signal, as they have added to their reserves for nine straight months as of July. This ongoing buying helps support gold prices, which surpassed $2,600 per ounce earlier this summer. The trend continues, with global central banks adding over 230 tonnes of gold in the second quarter of 2025 alone. Gold’s strength is connected to the dollar’s weakness. Following the Fed’s unexpected policy change in May 2025, confidence has weakened, causing the US Dollar Index (DXY) to drop from over 105 late last year to about 101.50 recently. This trend of moving away from the dollar makes gold more appealing for large institutions. For traders dealing with derivatives, now may be a good time to adopt a bullish stance on gold. Purchasing call options on gold futures or ETFs like GLD in the coming months can directly capitalize on this momentum. The implied volatility reflects uncertainty, but the overall price trend seems strong.Trading Strategies for Gold and Dollar
There are also opportunities to trade based on the difference between gold and the dollar. A pair trade—buying gold futures while shorting dollar index futures—can help hedge against broader market fluctuations. This strategy is designed to benefit from central banks diversifying away from the US dollar. We’ve seen a similar pattern before, especially in the years after the 2008 financial crisis, when central bank purchases led to a long bull run for gold. Looking forward, any signs of more geopolitical instability or dovish comments from the Fed could give this rally an extra boost. Traders should keep an eye on these potential catalysts in the weeks ahead. Create your live VT Markets account and start trading now.Maersk CEO highlights high demand and rising prices in the nearly full terminal industry
The demand for shipping containers is very high, with Chinese companies taking a bigger slice of the global market. China’s exports are growing faster than its overall economic growth. During the second quarter of 2025, freight spot rates jumped by 37% over just 13 weeks.
The trade agreement between the US and China is still in place, affecting supply chains for months since it began in May. Shipping capacity is nearly full, driving up freight costs due to continued demand. This surge in demand exists because businesses want to avoid the risk of new tariffs, as tariff policies can change unexpectedly.
Speculative Instruments for Rising Costs
With such high demand for containers and limited capacity, traders should consider investing in options that anticipate ongoing high shipping costs. Freight futures, particularly those linked to the Freightos Baltic Index, provide a direct way to bet on this trend continuing into Q3. Recent data shows that the global container freight index has continued to rise in early August 2025, building on the 37% increase seen in the second quarter. This trend signals a good opportunity to consider call options on major shipping and logistics companies in the upcoming weeks. During the post-pandemic boom of 2021-2022, similar conditions of tight capacity led to record profits for shippers. Data from early August 2025 reveals that global container fleet utilization is still above 95%, a level usually linked to significant port congestion and higher earnings for carriers. Strong growth in Chinese exports, which are outpacing GDP growth, backs up this outlook. Trade figures from July 2025 confirmed another month of export growth that exceeded expectations, driven by electronics and automotive parts. This trend makes derivatives on ETFs related to Chinese export-focused industrial companies appealing.Pressure on Import-Dependent Companies
In contrast, companies that rely heavily on imports and operate with narrow profit margins may feel the pressure. Rising freight costs, which take time to move through supply chains, are likely to squeeze profits for many US and European retailers in Q3. It may be wise to consider put options on retail sector stocks that usually react strongly to high shipping costs. The current situation is delicate, fueled by a rush to ship goods while the US-China trade agreement remains intact. This uncertainty could lead to increased market volatility if trade relations change. Traders might want to explore options strategies that could profit from significant price swings in either direction on major market indices. Increased shipping activity directly boosts demand for marine fuel. We’ve noticed bunker fuel prices rising over the past month, putting even more pressure on costs. Betting on increasing oil prices through futures or call options on energy sector ETFs could be another way to navigate this ongoing supply chain situation. Create your live VT Markets account and start trading now.Germany’s June imports rise to 4.2%, surpassing the expected 1% increase
**EUR/USD Gains**
Germany’s imports increased by 4.2% in June, beating the expected 1% growth. This indicates that trade activity was stronger than anticipated during that time.
The GBP/USD exchange rate is nearing 1.3400 before the Bank of England is expected to cut interest rates. During European trading hours, market trends showed upward movement, influenced by upcoming policy changes.
The EUR/USD pair gained slightly, moving above 1.1650 due to ongoing weakness in the US Dollar. Factors like potential interest rate cuts and worries about government policies are impacting the dollar.
Gold prices saw modest gains, staying under the $3,400 mark. The price remains steady as trade concerns are driving investments into safe-haven assets.
The Bank of England is likely to lower interest rates from 4.25% to 4.0%. Most members of the Monetary Policy Committee are expected to support this move, which comes amid discussions on rising inflation.
**US Economic Slowdown**
A look at the US economy reveals possible slowdowns in growth, even though trade has played a key role in recent performance. The report highlights ongoing volatility due to changing trade policies.
German imports showed surprising strength in June. Newer data, like July’s flash manufacturing PMI for the Eurozone at 51.2, suggests this positive trend is continuing. This signals a strong European economy, making long positions on the Euro appealing in the weeks ahead.
This underlying strength is pushing the EUR/USD pair above 1.1650. The US Dollar’s weakness is crucial, especially after the recent jobs report for July indicated hiring was slower than expected. We should think about buying call options on the Euro, betting on this trend continuing against the dollar.
The Bank of England is expected to cut interest rates from 4.25% to 4.0% this month. While the GBP/USD is rising towards 1.3400, such cuts have historically been negative for the Pound, similar to what happened during the 2020 pandemic response. This presents an opportunity to short the Pound, possibly by buying GBP/USD put options before the announcement.
Gold continues to be a safe-haven asset, remaining steady below $3,400 per ounce amid global trade concerns. This price is significantly higher than records set in the early 2020s, showing high levels of uncertainty are already factored in. We expect continued demand for gold as a hedge against market volatility.
Underlying all of this is the risk of a slowdown in the US economy. With the US VIX index recently rising above 22, market anxiety is high. Therefore, we should be ready for ongoing price fluctuations, using options strategies to benefit from this volatility.
Create your live VT Markets account and start trading now.
In July, Halifax house prices in the UK increased by 0.4%, surpassing the forecast of 0.3%
House prices in the United Kingdom exceeded expectations in July, rising by 0.4%, while a 0.3% increase was expected.
Financial markets are closely watching the upcoming Bank of England policy decisions, anticipating a cut in interest rates from 4.25% to 4.0%. The US Dollar is weak, affected by increasing speculation about a rate cut and concerns over tariffs. The GBP/USD is edging closer to 1.3400 as traders prepare for the expected BoE decision. Likewise, the EUR/USD is showing small gains above 1.1650, thanks to the ongoing US Dollar weakness.
Gold Prices and Trade Threats
Gold prices have remained stable, staying below the $3,400 mark, as recent trade tensions from the US have driven up demand for safe-haven assets. It’s believed that seven out of nine Monetary Policy Committee (MPC) members will support the rate cut, compared to three who did in the last meeting. Overall, instability in trade policies is causing economic fluctuations, but we expect that extreme trade fluctuations have peaked, and economic growth may slow down further. The anticipated Bank of England cut to 4.0% is mostly already reflected in the market, indicating that easy gains may be over. Rates have dropped from over 5.25% in early 2024, so this change is part of a clear downward trend. Traders should focus on potential surprises, such as a bigger 0.5% cut or an unexpected hold. As GBP/USD approaches 1.3400, its strength reflects broader US dollar weakness rather than UK optimism. The US Federal Reserve is also expected to cut rates soon, which keeps the dollar low. We suggest using options, like a long straddle, to take advantage of upcoming volatility around the BoE announcement without betting on a specific outcome.Inflation and Economic Outlook
The planned rate cut is supported by the recent slowdown in inflation, with the last Consumer Price Index in June 2025 showing 2.1%. This is a significant decline from the double-digit inflation of 2022, providing the Bank with room to adjust. The slightly better July house price data offers some reassurance but is unlikely to alter the Bank’s strategy. Gold maintaining near $3,400 per ounce indicates high demand for safety due to ongoing trade issues. Over the past two years, its price has risen significantly from around $2,000 in 2023. Traders may consider strategies like bull call spreads to capitalize on potential, albeit limited, further gains if trade tensions escalate. Overall, while acute trade shocks may be behind us, the economy is still slowing. This suggests we should be cautious about UK equity indices. Using derivatives to hedge long positions or to speculate on a modest decline in the FTSE 100 may be wise in the coming weeks. Create your live VT Markets account and start trading now.A gold breakout shows bullish momentum, prompting traders to look for strategic entry points.
Gold futures have recently broken through an important descending resistance line, indicating possible upward momentum. The price has moved past $3450 and is currently holding above $3458. This aligns with a positive outlook based on straightforward technical analysis using a single trendline on a 12-hour chart.
As gold futures approach $3467, traders might consider entry points at $3453.2, $3450.9, and $3457.3. These levels correspond with VWAP standard deviations and reflect recent accumulation areas, potentially providing support if the price retraces.
