China’s retail sales increased by 2.9% in October compared to last year, beating the expected 2.7% rise. This indicates a positive trend in consumer spending. At the same time, the USD/INR exchange rate fell as the US dollar weakened ahead of upcoming economic reports. The EUR/GBP climbed above 0.8850 due to worries about the UK’s financial health and poor GDP data.

Euro and Commodity Developments

The EUR/CAD pair approached 1.6250 as the European Central Bank signaled a careful stance on interest rates. Meanwhile, the Australian dollar strengthened while the US dollar declined due to concerns over upcoming data releases. Silver prices also rose, with XAG/USD moving above 52.50 amid uncertainty around US economic data. The Japanese yen gained against the weakening USD, though its potential for further gains is limited. Bitcoin, Ethereum, and Ripple saw significant drops, losing over 5%, 10%, and 2%, respectively, throughout the week. Bitcoin fell below $100,000, reflecting the current bearish market trends.

Market Risk and Strategic Outlook

The markets are showing a risk-off attitude, influencing our strategy for the upcoming weeks. Gold has climbed back above $4,200 an ounce, while speculative assets like Bitcoin have fallen below the critical $100,000 support. This trend suggests that traders are looking to lower their risk as the year comes to a close. The US dollar is weakening due to recent economic concerns, impacted by October’s disappointing jobs report and a slight cooling in inflation data (CPI). The market is now less likely to expect a Federal Reserve rate cut in December, with futures indicating only a 35% chance, down from over 60% last month. This situation creates uncertainty, suggesting we might use options to leverage volatility in pairs like EUR/USD, which is currently trading below its 50-day moving average. China’s better-than-expected retail sales growth of 2.9% offers a glimmer of hope for global growth. This small improvement from the sluggish third quarter of 2025 might support commodity-linked currencies. We see potential in pairing the Australian dollar against currencies facing domestic challenges, such as the British Pound. With the UK government recently deciding to halt tax increases, fiscal uncertainty is heavily impacting the Pound Sterling. We should expect further weakness in pairs like GBP/USD as markets question the country’s financial discipline. This makes buying GBP puts or taking short positions an appealing strategy through the end of November. Create your live VT Markets account and start trading now.

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