Australia’s S&P Global Services PMI for October was 52.5, falling short of the expected 53.1. This index gauges the health of the services sector, with scores above 50 showing growth. In other news, the USD/CAD rose to a seven-month high, crossing 1.4100 due to falling crude oil prices. WTI crude dropped near $60.00 as US oil inventories continued to increase.

Global Economic Influences

China’s Premier Li commented that unilateral protectionist measures have significantly affected the global economy. The PBOC set the USD/CNY reference rate at 7.0901, slightly up from the previous 7.0885, while AUD/USD hovered around 0.6450 following China’s recent PMI data. Gold prices increased slightly amid concerns over a potential US government shutdown. The financial market showed mixed results, with EUR/USD holding steady around 1.1500 due to cautious ECB policy outlooks. Other areas, such as GBP/USD, have seen declines and reached new lows. As of November 5, 2025, the recent dip in Australia’s services PMI suggests a slowing economy. This may be a sign to bet against the Australian dollar, which is already weak at 0.6450 due to poor data from China, its main trading partner. Traders might consider buying put options on AUD/USD, targeting levels below 0.6400 in the near future. The drop in crude oil prices, with WTI now near $60 a barrel, indicates slowing global demand. This price is significantly lower than the $80-$90 range seen for most of 2024, and the EIA reported a 3.5 million barrel increase in US inventories last week, suggesting this trend may continue. Selling call options on crude oil futures could be a smart move to gain premiums while betting on a price ceiling.

Market Trends and Strategies

There are clear signs of risk aversion as worries about a potential US government shutdown drive investors toward safe havens. Gold is trading just below the notable $3,850 level, indicating strong demand for protection. With high implied volatility, buying straddles on gold futures could be a strategic play to capture significant price movements as political deadlines approach. The strength of the US dollar against commodity currencies, like the Canadian and Australian dollars, is a key trend to watch. With the USD/CAD exchange rate surpassing 1.4100, we expect this trend to continue if oil prices remain low. Traders might consider using futures to maintain long positions in the US Dollar Index (DXY) as a hedge against a global economic slowdown. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now