**Gold Market Stability** Litecoin has experienced a significant increase, trading over $118 and gaining more than 10% this week. This rise is supported by higher trading activity and positive technical analysis indicating potential growth above $130. In the Eurozone, inflation reached 2.2% in September, mainly due to energy prices. However, these effects are expected to lessen. The European Central Bank is likely to keep interest rates steady. FXStreet shares this information for general market commentary and does not provide personalized investment advice. Any errors or omissions are not the responsibility of FXStreet or its authors. **Australian Dollar Vulnerability** The sharp 7.8% drop in Australian exports for August raises significant concerns. This decline follows a 3.3% growth in July and marks the largest month-on-month drop since trade disruptions in early 2023. Recent data indicates that the slowdown is mainly due to weakening industrial demand from key partners like China, where industrial production growth has slowed to 3.9% year-on-year. This export shock puts the Australian dollar in a vulnerable position, especially compared to stronger currencies like the Euro and Pound. It increases the likelihood that the Reserve Bank of Australia, which has maintained a cash rate of 4.50% for the last four meetings, may adopt a more dovish stance. Derivatives pricing may begin to shift, anticipating that the next interest rate move could be a cut rather than a hike. While the US dollar is weak because of the government shutdown, the negative data from Australia is more serious. We believe a good strategy is to use currency options, specifically buying AUD/USD puts to limit risk while possibly taking advantage of a downturn below 0.6400. Alternatively, shorting the Aussie against the Euro (AUD/EUR) could be a cleaner option, given that the European Central Bank is expected to keep rates steady for now. The trend in gold toward $4,000 highlights a strong demand for safe havens. A weakening currency linked to commodities like the AUD is likely to underperform in this scenario. We’ve seen this pattern before, such as during the 2014-2015 period when a slowdown in Chinese demand caused a multi-year decline in the Australian dollar. Current export data suggests a similar situation could occur now, making long volatility positions on the AUD an interesting tactic. Create your live VT Markets account and start trading now.

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