Indonesia’s core inflation in September rose by 2.19% compared to last year, just under the expected 2.2%. This measure aims to highlight economic trends without the impact of food and energy price changes. Several international economic trends were also observed. The EUR/USD is holding stable around 1.1750, benefiting from a weaker US Dollar amid a US government shutdown. Gold prices are climbing, nearing the $3,900 mark, driven by geopolitical tensions and the ongoing shutdown.

Currencies And Market Responses

The GBP/USD pair has increased above 1.3450 due to concerns about US government operations, affecting global currency markets. The upcoming ADP Employment Change report for September is also expected to shed light on the US Federal Reserve’s interest rate decisions. In Ukraine, economic difficulties continue because of ongoing conflicts, leading to talks about a new IMF program. This economic pressure might prompt deeper debt restructuring and the potential use of frozen Russian assets. Amid these developments, traders should carefully evaluate their goals, experience, and risk appetite when trading foreign exchange, especially considering the effects of leverage. The US government shutdown is significantly impacting the markets, causing the US Dollar to weaken. This situation is pushing currency pairs like EUR/USD and GBP/USD higher, creating quick opportunities for momentum strategies. Traders might consider buying call options on these currencies to benefit from the trend while managing risks.

Market History And Strategies

Historically, markets often react briefly to US shutdowns. For instance, during the 35-day shutdown ending in January 2019, the S&P 500 gained over 10% as investors looked forward to a resolution. This suggests that the current weakness in the dollar could quickly reverse, so using derivative structures that guard against sudden recoveries could be wise. The push for safety is driving Gold prices toward $3,900, a typical reaction to US political uncertainty. Market volatility is also rising, with the VIX index—a measure of market fear—soaring above 28 points this week, a level not experienced since early 2024’s banking issues. Traders should consider buying straddles on gold-related assets to profit from significant price movements in either direction. Closer to Indonesia, the core inflation figure of 2.19% is not likely to cause major shifts. It fits comfortably within Bank Indonesia’s target range of 1.5-3.5%, indicating that interest rates will likely remain stable in the near term. This stability for the Rupiah makes derivatives on the USD/IDR pair appealing for strategies focused on range-bound or yield-carrying approaches. All attention is now on the upcoming US ADP employment data for further clarity. A weak report may heighten fears of an economic slowdown and deepen the dollar’s decline, while a strong report could lead to a quick reversal. High implied volatility is expected, so positioning with options that have defined risk could be a smart move before the release. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now