The US Dollar’s Mixed Performance On Monday, the US Dollar showed mixed movement as the market awaited news on the 40-day federal government shutdown. There were hopes for a resolution, which shifted focus back to US economic data and lowered expectations for another Federal Reserve rate cut in December. The US Dollar Index (DXY) rose slightly to 99.70, thanks to increasing US Treasury yields, with the NFIB Business Optimism Index and the ADP Employment Change reports coming soon. Meanwhile, the EUR/USD pair faced challenges and dropped back below 1.1550, with important German and eurozone data on the horizon. The GBP/USD continued to climb, approaching 1.3200, ahead of the UK labor market report and the BRC Retail Sales Monitor. The USD/JPY moved past 154.00 as the Yen weakened, with upcoming reports on Japanese Bank Lending, Current Account results, and the Eco Watchers Survey. The AUD/USD hit a four-day high at 0.6540, with Australian Westpac Consumer Confidence and NAB Business Confidence reports due. Meanwhile, WTI crude oil prices rose above $60 per barrel due to oversupply concerns. Gold and silver also increased, reflecting expectations of eased Federal Reserve policies, with gold surpassing $4,100 per troy ounce and silver trading above $50.00 per ounce. Impact of the Potential Shutdown Resolution The potential end of the 40-day US government shutdown is capturing the market’s attention, creating a positive atmosphere that is boosting the dollar. We should anticipate a relief rally in the US Dollar Index, but remain cautious due to high volatility. The weekly ADP employment figures will be crucial, especially since the October 2025 numbers were softer than expected, causing some policy uncertainty. The weak Euro compared to the strong British Pound presents a clear trading opportunity in the coming weeks. We are monitoring the declining German ZEW survey, which has dropped for two consecutive quarters, to potentially sell EUR/USD futures. A solid UK jobs report, especially if wage growth stays above the recent 5% annual rate, could trigger an opportunity to buy GBP/USD calls, aiming for a rise above 1.3200. With USD/JPY exceeding the 154.00 mark, there is a strong appetite for risk that could grow if a shutdown resolution is confirmed. However, we should remember that similar levels in 2024 raised serious concerns from Japan’s Ministry of Finance, so using options to guard against sudden intervention risks is advisable. Currently, the momentum seems to favor further weakness in the yen. Rising Commodity Prices WTI crude oil’s rise above $60 a barrel, despite concerns about oversupply, reflects positive sentiment around the US economy resuming full activity. This optimism is also boosting the Australian dollar, with the potential for further increases if the NAB Business Confidence survey improves from the disappointing third-quarter results of 2025. This may be a good time to explore strategies that benefit from a rising AUD/USD. Even with a stronger dollar, gold’s stability above $4,100 an ounce highlights ongoing concerns about inflation. This aligns with the latest US Consumer Price Index data for October 2025, which shows inflation remains stubbornly high at 4.2%. While a shutdown resolution may briefly impact precious metals, any sign of economic weakness in upcoming data could encourage buying in gold and silver derivatives as a hedge. Create your live VT Markets account and start trading now.

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