In October, Brazil’s IPCA inflation rose by 0.09%, missing the forecast of 0.16%. This shows small shifts in the country’s inflation trends. In currency news, GBP/USD remains steady even as UK unemployment rises, leading to expectations of a potential rate cut by the Bank of England (BoE). The unemployment rate hit 5% for the three months ending in September, with a loss of 22,000 jobs during that timeframe.

Exchange Rates And Precious Metals

The EUR/USD exchange rate is nearing 1.1600 due to a weaker US dollar, as recent US ADP data reported a loss of 11,250 jobs for the week ending October 25. Gold is trading above $4,100 per troy ounce as the US dollar softens and market sentiment remains cautious. Bitcoin’s price is over $105,000, but there’s low demand from both institutional and retail investors, which is slowing its recovery. Altcoins like Ethereum and Ripple are also cooling off, indicating that traders may be taking profits and showing less appetite for risk. Bitcoin Cash is up 1% on Tuesday, showing bullish signs as capital flows into BCH futures increase. This suggests a strong demand for this cryptocurrency. Brazil’s inflation for October was softer than expected, recorded at 0.09% versus a forecast of 0.16%. This could prompt the central bank to consider cutting the Selic rate from the current 8.5% sooner than anticipated. We should explore opportunities to profit from a possible rate cut at the December Copom meeting.

Weak US Labor Market And Inflation

The weak US labor market signals from late October are worsened by slowing inflation. The latest Consumer Price Index (CPI) report shows inflation easing to 2.8%. This creates a stronger case for the Federal Reserve to start easing policy, putting downward pressure on the US dollar. We are positioning ourselves by looking at derivatives linked to a weaker dollar against major currencies. In the UK, unemployment has also ticked up, a trend we have seen since mid-2025. GDP growth for the third quarter was flat at 0.0%, adding pressure on the Bank of England to take action. Therefore, we see chances in selling sterling futures, as expectations of rate cuts will likely limit significant rallies. This environment of coordinated central bank easing is beneficial for non-yielding assets like gold. We see gold holding firm above $4,100 an ounce, similar to previous easing cycles after the 2008 crisis. We believe buying call options on gold miners or gold futures is a good way to take advantage of this continued strength. While it seems clear that rates are heading lower, the exact timing is still uncertain, causing market anxiety. The VIX index reflects this, rising from the low teens to over 22 in the past month. Traders should think about buying straddles or strangles on major indices to profit from the increased price swings we expect as we approach year-end central bank meetings. Create your live VT Markets account and start trading now.

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