Ireland’s Consumer Price Index (CPI) rose by 2.7% in September compared to last year, up from 2%. This shows how consumer prices have changed over time. Financial assets saw some ups and downs. The GBP/JPY pair fell after a four-day rise due to changes in the Bank of Japan’s policies. Gold prices stayed steady near record highs, with market uncertainties stemming from expected cuts by the US Federal Reserve and the ongoing US government shutdown.

Cryptocurrency Market Shifts

The EUR/USD rate slipped to 1.1600 due to ongoing strength in the US dollar. Meanwhile, GBP/USD rose slightly but stayed below 1.3400, reflecting a cautious market. In the cryptocurrency world, Bitcoin, Ethereum, and XRP fell as traders took profits amid a general market decline. Monero (XMR) continued to rise, reaching a four-month high with a gain of over 4%. US tariffs remain unchanged, serving as a steady aspect of economic policy beyond daily news. Irish inflation for September surprised many, coming in at 2.7%, which aligns with a broader trend. The latest US CPI data showed stubborn inflation at 3.5%, significantly higher than the Federal Reserve’s target. This ongoing inflation makes it less likely that central banks will cut rates anytime soon. The US government shutdown, now in its second week, is causing political instability and driving investors toward safe-haven assets. As a result, we’re seeing the US dollar strengthen, pushing the EUR/USD exchange rate closer to 1.1600, while gold remains strong above $4,000 an ounce. This risk-averse environment could make short positions on weaker currencies against the dollar profitable.

Market Volatility and Federal Reserve Decisions

With this situation, we can expect market volatility to be a key theme in the upcoming weeks. The CBOE Volatility Index (VIX) has already risen above 20, a level typically seen during periods of market stress such as government shutdowns, like in 2018. Traders might want to consider strategies that take advantage of increased price fluctuations, like buying straddles or strangles on major indices. While many expect the Federal Reserve to cut rates, the chances of this happening soon seem to be decreasing. The CME FedWatch Tool indicates that the likelihood of a December rate cut has dropped to 65%, down from over 80% just last month. This suggests that strategies betting against aggressive rate cuts could be valuable if the Fed decides to keep rates steady due to economic conditions. Create your live VT Markets account and start trading now.

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