On Thursday, October 9, eyes will be on comments from US central bank officials, especially Fed Chair Jerome Powell. The ongoing US government shutdown has postponed important data releases, shifting the focus for market observers. The US Dollar (USD) has stayed steady after three days of gains, showing notable strength against the Japanese Yen with a rise of 2.39%. Comments from Fed officials and the minutes from the September meeting indicate that further rate cuts could be on the table this year.

Government Shutdown Continues

The US Senate has once again failed to pass a funding bill to end the government shutdown. President Trump has promised back pay for those affected. In international news, a peace agreement between Israel and Hamas may be close, potentially leading to hostage releases and troop withdrawals. In currency trading, EUR/USD is drifting down towards 1.1600, while GBP/USD remains below 1.3400. USD/JPY is on the rise, trading above 153.00. Although Gold dipped slightly early Thursday, it still trades above $4,000 due to lowered geopolitical tensions. The Federal Reserve influences US monetary policy through interest rate changes, which in turn affect the strength of the US Dollar. The Fed meets eight times a year and uses strategies like Quantitative Easing and Tightening to manage the economy. Today is October 9, 2025, and reflecting on the market conditions from that time is helpful. The Dollar Index was at 99 during the government shutdown, but it has since traded at a higher range. Currently, the DXY is around 105, showing the dollar’s strong performance driven by a robust US economy.

Currency Intervention Risks

The rise in USD/JPY above 153 indicated the yen’s ongoing weakness. We are currently observing this pair test the 162 mark, fueled by the interest rate gap between the Federal Reserve and the Bank of Japan. Derivative traders should tread carefully, as the chance of currency intervention from Japanese officials is now much greater than it used to be. We recall the panic that pushed Gold to $4,000 an ounce during the unexpected announcement of a peace plan between Israel and Hamas. Today, with geopolitical tensions shifting, Gold is now trading at a more stable $2,550, illustrating how quickly fear can leave the market. This historical spike serves as a vital lesson in managing risks during significant geopolitical events. The government shutdown highlighted how dependent markets become on Fed commentary when crucial data is delayed. Although there isn’t a shutdown now, the US national debt has climbed past $37 trillion, raising concerns for future budget negotiations and potential market volatility. The Fed’s stance has also changed from leaning towards rate cuts to keeping rates steady in order to handle inflation, which is currently at an annual rate of 2.8%. In this context, options strategies that take advantage of sudden market moves seem wise. Buying straddles or strangles on major currency pairs like EUR/USD could be a smart way to prepare for unexpected political developments or shifts in central bank messaging. With implied volatility relatively low, these positions are more affordable compared to previous crisis periods. Create your live VT Markets account and start trading now.

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