Insights 
VT 
The S&P/Case-Shiller Home Price Indices in the United States showed a year-on-year increase of 1.6% for August, which was below the forecasted increase of 1.9%.
The financial landscape is experiencing fast-paced changes, with the Federal Reserve and the Bank of Canada expected to adjust their interest rates soon. Meanwhile, the AUD/USD is steady ahead of Australia’s Q3 inflation data and a possible Fed decision.
Currency And Oil Dynamics
The USD/JPY moved close to 152.00 due to a stronger yen following US-Japan trade progress, and the EUR/USD saw modest gains as Federal Reserve interest rate decisions are anticipated. OPEC+ production increases led to a decrease in WTI oil prices, yet partial support remains due to Russia sanctions.
The GBP/USD is defensively positioned below 1.3300 amid US Dollar softness and UK fiscal concerns. Gold, initially under selling pressure, is rallying back towards the $4,000 mark per troy ounce.
In the cryptocurrency market, Bitcoin is attempting an upward trend beyond $114,000, and altcoins like Ethereum and Ripple maintain their positions with ETF inflow prospects. Additionally, Pump.fun (PUMP) saw recovery, rising above $0.0050, indicating potential for a bullish month-end.
The August Case-Shiller data confirmed what we’ve been seeing in the housing market, with price growth coming in below expectations. This slowdown, combined with last week’s report that September 2025 Existing Home Sales fell for the third consecutive month, gives the Federal Reserve cover to act. We believe this weakening data is the main reason markets are now positioned for an interest rate cut.
Anticipated Federal Reserve Decision
With the Fed’s decision expected tomorrow, a dovish pivot seems almost certain. The CME FedWatch tool is now pricing in an 85% probability of a 25-basis-point rate cut, as core inflation has trended down to 2.8% from its highs earlier in the year. This is fueling the US Dollar’s decline and supporting risk assets across the board.
For traders, this means considering strategies that benefit from a falling dollar. We see potential in buying call options on the EUR/USD as it holds firm around 1.1660. Selling at-the-money put spreads on the AUD/USD could also be attractive, as the pair is strengthening ahead of its own inflation data.
The British Pound remains an outlier, sinking below 1.3300 due to severe domestic fiscal worries. Unlike the US, the UK’s problems suggest the Bank of England may be forced into a deeper cutting cycle, weighing heavily on the currency. We would be cautious with long GBP positions until the new budget provides more clarity.
Gold is using the drop in US Treasury yields to find support around the key $4,000 mark. An actual rate cut should provide another tailwind for the non-yielding metal. This is a much clearer fundamental picture for gold than we saw during the volatile trade disputes of the early 2020s.
In the crypto markets, Bitcoin’s ability to hold above $114,000 shows that bulls are not afraid of the central bank’s announcement. A more accommodative Fed policy would likely be interpreted as a bullish signal for assets with limited supply. The recent resurgence in ETF inflows suggests institutional money is anticipating a positive end to the month.
