Australia’s unemployment rate dropped to 4.3% in October, better than the expected 4.4%. This shows positive trends in the job market. In other news, the AUD/JPY reached a yearly high of 101.60, supported by strong employment data. The USD/INR also increased due to foreign investments leaving the Indian stock market.

Currency Movements Amid Economic Shifts

The EUR/USD stabilized around 1.1590 after the US government ended a 43-day shutdown. Meanwhile, GBP/USD remained flat at about 1.3120, as traders awaited the UK’s third-quarter GDP report. Gold prices rose, hitting a three-week high of around $4,213. This increase was fueled by hopes that the US Federal Reserve might shift to a more relaxed policy after the government shutdown. Stellar (XLM) was doing well, nearing a key price point of $0.297, thanks to its partnerships with Turbo Energy and Taurus S.A. on renewable projects. In the bond market, European indices performed well, but the FTSE 100 showed a slight decline. Hyperliquid (HYPE) stayed above $38 despite a $4.9 million loss.

Economic Resilience and Strategic Implications

Australia’s unemployment rate of 4.3% in October signals ongoing economic strength that markets didn’t fully expect. This strong job market means the Reserve Bank of Australia (RBA) is unlikely to ease its policies. We believe the RBA will maintain a hawkish stance for the rest of the year. The recent third-quarter inflation report showed core CPI at 4.1%, still above the RBA’s desired range. Strong employment combined with ongoing inflation makes a rate cut unlikely, providing support for the Australian dollar. For those trading derivatives, this environment suggests bullish strategies on the Aussie dollar in the upcoming weeks. We recommend buying AUD/USD call options expiring in January 2026 to capture potential gains. These trades can benefit from a stronger local currency, as the central bank stays alert on inflation. We can compare this to 2023 when a tight labor market led to unexpected hawkish moves from the RBA, even while other central banks paused. At that time, the market underestimated the RBA’s stance, resulting in profitable currency trends. Today’s data suggest we might be in a similar situation. While the domestic outlook is strong, we’re also monitoring market volatility, with the VIX around 19.5. This indicates broader uncertainty, making defined-risk option strategies more appealing than leveraged futures. The focus should be on currency pairs with clear differences in central bank policies, like the Japanese Yen or Swiss Franc. Create your live VT Markets account and start trading now.

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