South Korea’s industrial output rose by 2.4% in August, a significant increase compared to the previous period’s 0.3% rise. This data is released during various global economic changes and market developments. In currency news, the AUD/USD is holding below 0.6600 as traders wait for the Reserve Bank of Australia’s policy decision. The USD/JPY remains above 148.50, with attention on the Bank of Japan’s Summary of Opinions that impacts the Japanese Yen.

Gold Prices Rise

Gold prices are approaching record highs, increasing by 12% in September due to fears about a potential US government shutdown. Bitcoin is stable above $114,000, despite recent ups and downs, with hopes high for ‘Uptober’. FXStreet lists the top brokers for EUR/USD trading, providing competitive conditions for different market participants. They highlight the risks of foreign exchange trading, urging thorough research and attention to market risks. FXStreet stresses that their information is not investment advice and reminds readers about the speculative nature of trading. It’s important for everyone to evaluate their financial situation before engaging in high-risk trading. The possible US government shutdown is causing significant market anxiety, pushing investors towards safe assets like Gold. Similar patterns occurred during the 2018-2019 shutdown, where the CBOE Volatility Index (VIX) spiked over 30. We should prepare for a similar increase in implied volatility across major indices, leading to more expensive options.

US Jobs Data and Market Effects

Gold is experiencing its best month in over ten years, with prices nearing $3,850. We can expect this momentum to continue as long as the shutdown threat looms. Buying outright call options is getting pricey, so considering bull call spreads on gold futures or related ETFs might be a cost-effective way to gain further upside. This strategy limits our potential profits while defining our maximum risk in this uncertain climate. The ongoing uncertainty from the Bank of Japan keeps the yen weak, making the USD/JPY carry trade appealing. With the interest rate difference between the US and Japan still over 500 basis points, selling JPY call options or buying the pair on dips remains a good strategy. We should be cautious about the US jobs data coming out on Friday, as a weaker-than-expected report could challenge the recent strength of the dollar. We can’t overlook the strong industrial output from South Korea, which exceeded expectations significantly. This data, along with reports of rising semiconductor exports for the second straight month, suggests that the global manufacturing cycle may be on the mend. This could be a sign to consider long call options on key Asian tech ETFs to hedge against the current US-focused pessimism. Bitcoin is solidly above $114,000, partly due to the seasonal “Uptober” trend. History shows that October tends to be a positive month for crypto. We might use this seasonal boost by looking at short-term call options, but with Non-Farm Payrolls due on Friday, a straddle strategy could be smarter to take advantage of potential volatility in either direction. Create your live VT Markets account and start trading now.

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