In October, New Zealand’s ANZ Business Confidence index increased from 49.6 to 58.1. This shows a positive trend in the business environment. The Bank of Japan has decided to keep its interest rate at 0.5%. This decision meets market expectations and indicates stability in their approach. After the announcement, the Japanese Yen weakened slightly, and attention now turns to the upcoming press conference.

Foreign Exchange Movements

In foreign exchange movements, the EUR/JPY rose above 177.50 due to the Bank of Japan’s rate decision. The GBP/USD bounced back to 1.3200 as the US Dollar weakened a bit. However, analysts remain cautious about future gains. Gold is stabilizing around $3,950 after some fluctuations. This is linked to recent Federal Reserve decisions and ongoing US-China trade talks. Cryptocurrency has been active, with altcoins like Official Trump, Pump.fun, and Zcash seeing double-digit gains. The Pi Network is also holding strong above $0.2600, indicating a possible breakout ahead. These trends reflect changes in both traditional and digital financial markets. The strong rise in New Zealand business confidence to 58.1 is a positive sign for the Kiwi dollar. This data supports the idea that the Reserve Bank of New Zealand will keep its high interest rate at 5.50% from last month’s review. We should consider buying NZD call options or investing in NZD futures, especially against currencies with more lenient central banks.

Bank of Japan’s Monetary Policy

The Bank of Japan’s choice to maintain a low interest rate of 0.5% continues to make the yen attractive for funding. This trend has been steady throughout 2025, following the weakness we noticed starting in 2023. The growing interest rate gap supports carry trades, making long positions in pairs like AUD/JPY and NZD/JPY appealing in the coming weeks. Despite some risk-on sentiment, gold’s stability near $3,950 an ounce suggests lingering market fears. Inflation has remained stubbornly high, exceeding central bank targets in the US and Europe this year, which makes gold a valuable protection. We should consider options on gold futures, like buying puts, to safeguard our portfolios from sudden market shifts. The outlook for major currency pairs like EUR/USD and GBP/USD remains unclear. With the European Central Bank likely to stay on hold and the market still digesting the last US Federal Reserve meeting, these pairs may trade within a range. Using options strategies like straddles could be more effective than trying to predict a clear direction. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now