FXStreet disclaims any guarantees regarding the accuracy of the provided information. It is also not liable for any losses or damages resulting from investments based on this information. All trading involves risk, and decisions should be made following thorough research.<\/p>\n
The information reflects the authors’ views and does not necessarily coincide with FXStreet’s policies. The authors have no business relations or positions in the mentioned stocks. For further details, please check their terms, privacy policy, and other legal documents on FXStreet.<\/p>\n
The recent US inflation data for November came in at 2.7%, missing expectations and confirming a cooling trend. This has significantly weakened the US dollar across the board as markets now expect the Federal Reserve to pivot. We are seeing fed funds futures pricing in a greater than 70% chance of a rate cut by the March 2026 meeting.<\/p>\n
While the euro has strengthened against the dollar, the European Central Bank is clearly uncomfortable with its rapid rise. Lagarde\u2019s comments about watching the euro\u2019s appreciation suggest they could talk it down to help with their own inflation fight. This verbal intervention may cap the EUR\/USD’s upside potential in the near term.<\/p>\n
The Bank of England\u2019s decision to cut rates was a dovish surprise, yet the pound sterling rallied past 1.3400. This shows that the market is far more focused on the weak US dollar story than on UK monetary policy right now. For now, derivative plays should favor the dollar’s weakness over the pound’s fundamentals.<\/p>\n
Gold has reacted strongly, pushing towards the $4,350 level as the dollar and Treasury yields have fallen. The prospect of lower interest rates for longer reduces the opportunity cost of holding non-yielding assets like gold. Historically, environments of a weakening dollar and falling real yields have been highly supportive for precious metals.<\/p>\n
We see strength in the Mexican peso, supported by solid domestic data like the recent 3.4% rise in retail sales for October. Mexico\u2019s high interest rates compared to the US make it an attractive currency, especially as the “nearshoring” trend continues to boost its economy. This reinforces the case for being long MXN against the USD.<\/p>\n
Overall market volatility is decreasing as we approach the end of the year, with the VIX falling below 13 this past week. This suggests traders are comfortable with a “risk-on” sentiment heading into the holiday-thinned weeks. Selling volatility through options strategies could be advantageous, assuming no major geopolitical shocks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Mexico’s retail sales rose 3.4% year-over-year in October, surpassing expectations of a 3% increase.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-37217","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37217"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37217\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}