Australia’s employment changed by 14.9K in September, which is 2.1K lower than the expected 17K. This shows a drop in the anticipated job growth. In other market news, weaker jobs data is hurting the Australian dollar. As a result, many are now expecting the Reserve Bank of Australia to cut interest rates.

Global Currency Impact

Meanwhile, USD/CAD stays below 1.4050 due to ongoing trade tensions between the U.S. and China, which are affecting currency stability. WTI crude oil is holding losses around $58.00, with limited decline as India pauses Russian oil imports. The US dollar index has dropped to its lowest level in over a week, now under the mid-98.00s. In contrast, the Japanese yen is gaining strength as investors seek safe-haven currencies, putting pressure on USD/JPY. In the cryptocurrency market, tokens like Aster, PancakeSwap, and Immutable are struggling. As Bitcoin approaches $110,000, these tokens are facing losses due to a market supply dump. Gold prices are aiming for $4,250, driven by expectations of US rate cuts and ongoing trade conflicts. Gold, seen as a safe-haven asset, continues to attract buyers amid economic uncertainty.

Market Strategy Insights

The disappointing Australian jobs report supports our belief that the Reserve Bank of Australia will soon cut rates. Derivatives markets now show an 85% chance of a rate cut next month, up sharply from last week. This makes buying put options on the AUD/USD a smart move to take advantage of further declines. Worries about a long U.S. government shutdown are putting pressure on the US Dollar. We saw during the 35-day shutdown in 2018-2019 how the dollar index weakened, and current conditions with likely Fed cuts could worsen that impact. Selling US Dollar Index futures or buying call options on the EUR/USD allows traders to position for this ongoing weakness. Gold’s rise towards $4,250 reflects global uncertainty and fears over the value of fiat currencies. Central banks are still buying gold, continuing a trend that started to accelerate in 2022. Given these rising prices, using call options on gold futures can help you gain more upside while managing your risk. Across all markets, the combination of geopolitical tensions and U.S. fiscal worries suggests we should expect more volatility. The VIX index, a measure of market fear, has already jumped to 28, well above its historical average, signaling that traders are preparing for significant price changes. In this environment, strategies like buying VIX call options or using straddles on major currency pairs are worth considering in the coming weeks. Create your live VT Markets account and start trading now.

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