The Ivey Purchasing Managers Index (PMI) for Canada was at 52.4 in October, below the expected 55.2. This shows a slowdown in business conditions. At the same time, US markets were unstable. The Dow Jones Industrial Average fell by 250 points due to ongoing AI sell-offs. In Mexico, Banxico lowered interest rates to 7.25%, hinting they might pause further rate cuts.

Market Overview

Gold prices stayed close to $4,000 as demand rose because of a US government shutdown and layoffs. In the currency markets, the EUR/USD pair gained some ground, moving past 1.1500, while GBP/USD reached new heights around 1.3140. Ethereum dropped below $3,300, continuing its downward trend alongside Bitcoin. In contrast, Solana rebounded, trading above $160, benefiting from renewed interest from both retail and institutional investors. Looking ahead, the strength of the US Dollar may face challenges as we approach key economic events. In 2025, the focus for selecting the best brokers will include low spreads and trading platforms across different regions. The Canadian Ivey PMI for October falling short of expectations signals a slowing economy. With a reading of 52.4 compared to the forecast of 55.2, the Bank of Canada is likely to adopt a more cautious approach in its upcoming meetings. It may be wise to consider buying puts on the Canadian dollar or selling CAD futures, as the currency seems likely to weaken against others.

Financial Strategies

The US dollar is exhibiting significant weakness due to worries about a government shutdown and rising layoffs. This is evident as the Dollar Index has dropped below 104 for the first time since June, with weekly jobless claims increasing to 225,000. This situation makes it appealing to buy call options on EUR/USD and GBP/USD to take advantage of further declines in the dollar. Conflicting signals in the market suggest the need for hedging strategies. While the Dow has recently dropped, gold remains strong near $4,000 an ounce, reflecting considerable uncertainty. We should consider buying VIX calls as it approaches the 20 level, and holding gold futures seems wise to guard against US political and economic risks. Differences in central bank policies create a clear opportunity, especially between the UK and Canada. The Bank of England is maintaining a hawkish stance with UK inflation at 3.1%, while Canada’s weak PMI suggests a more cautious approach. A long GBP/CAD position, using futures or options, appears to be a solid strategy given this policy gap in the coming weeks. Create your live VT Markets account and start trading now.

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