Insights 
VT 
On Thursday, financial markets experienced low trading volumes due to the Thanksgiving Day holiday in the United States. The European economic calendar included business and consumer sentiment data, while the European Central Bank released the minutes from its October policy meeting.
The US Dollar’s performance this week showed weakness against several major currencies, with the most notable decline of 1.80% against the New Zealand Dollar. Data from the US Department of Labor indicated a decrease in Initial Jobless Claims to 216,000 for the week ending November 22. Additionally, Durable Goods Orders increased by 0.5%, helping to maintain a risk-positive market environment.
Uk Economic Updates
In the UK, Finance Minister Rachel Reeves announced tax increases on savings, dividends, and property incomes, alongside an extension of the income tax freeze. This saw the GBP/USD rise to its highest level in a month, reaching 1.3270 before stabilising. EUR/USD approached 1.1610, while USD/JPY saw modest midweek gains and began to decrease early Thursday.
Gold remained above $4,150, buoyed by expectations for a potential Federal Reserve rate cut in December. Risk sentiment continues to influence currency and commodity performance, with distinct behaviours observed in “risk-on” and “risk-off” environments.
The market is currently quiet due to the Thanksgiving holiday in the US, but we should not mistake this for a lack of direction. With liquidity expected to return next week, the prevailing risk-on sentiment is likely to accelerate. We are positioning for continued weakness in the US Dollar over the coming weeks.
The primary driver for this outlook is the growing certainty of a Federal Reserve rate cut in December. Recent data from mid-November 2025 showed key inflation metrics cooling, with the headline Consumer Price Index (CPI) falling to 2.9%. The CME FedWatch Tool now shows the market is pricing in an 85% probability of a rate cut at the next meeting, making a dovish Fed pivot our central scenario.
Currency And Market Predictions
This environment strongly favors currencies like the New Zealand and Australian Dollars, which have been the top performers against the US Dollar. We see opportunities in buying calls or taking long positions on these currencies against the greenback. The S&P 500 has already rallied over 6% this month, and we expect this trend to continue, supporting long positions in equity index futures.
The British Pound has seen a short-term boost from the Autumn Budget, but its momentum may fade. The Euro’s upside could also be limited, as the recently published ECB accounts from the October 2025 meeting suggest the bank is hesitant to tighten policy amid sluggish growth. Therefore, we prefer the commodity currencies over European FX for capturing dollar weakness.
Gold trading above $4,150 is a significant signal of the market’s expectations for lower interest rates. As the opportunity cost of holding non-yielding assets decreases, gold becomes more attractive. We anticipate further upside for the precious metal, making long positions in gold derivatives a core strategy heading into the end of the year.
