Insights 
VT 
The GBP/USD pair fell during Thursday’s North American session as the US Dollar hit a 9-week high, with the USDollar Index reaching 99.51 due to increased US Dollar buying. GBP/USD dropped to 1.3314, marking a decline of 0.67%, and its lowest since August 6.
For three consecutive trading days, Pound Sterling (GBP) has been losing against the US Dollar (USD). However, during the Asian session on Thursday, GBP/USD showed some recovery after reaching a two-week low, with spot prices exceeding 1.3400 as the US Dollar weakened slightly.
Other Market Movements
Other market movements include a drop in EUR/USD to levels last seen in early August, mainly due to a strong US Dollar and shutdown concerns. Gold prices fell below $4,000 per ounce as traders took profits, amid ongoing geopolitical tensions and potential Fed rate cuts.
In the cryptocurrency market, Ethereum witnessed an 8% decline over the past three days, with medium-scale holders reducing their holdings by 1.22 million ETH since Monday. Meanwhile, Zcash experienced an upward trend, potentially breaking above $200 soon.
The prevailing strength of the US dollar should be the primary focus for the next few weeks. With the DXY index pushing to multi-week highs and breaking 99.50, we see this momentum continuing as speculative positioning builds. Data from last week showed non-commercial traders increased their net long US dollar positions by over $2 billion, the largest weekly jump since July 2025.
For those trading the pound, the break below the 1.3300 level against the dollar is a significant technical signal for further weakness. We should consider buying put options on GBP/USD, targeting moves toward the summer 2025 lows. The UK’s own stubborn services inflation, which registered at 4.8% in the latest report, gives the Bank of England very little room to maneuver and support the currency.
The Euros Sharp Decline
The euro’s sharp decline below 1.1600 is being driven by both dollar strength and specific political risks emerging from France. This situation is reminiscent of the market jitters we saw during the French election cycle in 2022, which also fueled a flight to the safety of the dollar. We view put options on EUR/USD as a direct way to position for a test of the 1.1500 support level.
Broader market fear, confirmed by the Dow Jones hitting a one-week low, suggests a risk-off environment that typically benefits the dollar. The CBOE Volatility Index (VIX) has climbed over 20% in the last ten days to trade above 19, indicating traders are actively buying protection against further stock market declines. This supports strategies that are short risk assets.
Gold’s retreat from its all-time highs above $4,000 shows that even traditional safe havens are struggling against the dollar’s dominant run. During past periods of acute risk, like the government shutdown scare of late 2023, the dollar often outperforms gold in the short term as global capital seeks liquidity above all else. We would be cautious about buying this dip in gold until the dollar’s momentum shows signs of fading.
