In August, South Korea’s service sector output dropped to -0.7%, down from 0.2% the month before. This decline highlights challenges for the economy. The AUD/USD held steady below 0.6600 as traders waited for the Reserve Bank of Australia’s policy decision. Meanwhile, Gold prices surged and are set for their best month in 14 years, driven by fears of a possible US government shutdown.

Currency Movements and Market Activities

The USD/JPY stayed above 148.50 following the Bank of Japan’s update, affecting currency trends. Bitcoin remained stable above $114,000 after earlier fluctuations, with market watchers eager for upcoming economic data. Jerome Powell from the Fed expressed a cautious approach in his recent speech, reflecting the challenging economic landscape for policymakers. It’s essential to verify the information in this article independently. Trading and investing carry significant risks, including possible financial losses. With a potential US government shutdown on the horizon, markets are seeing a classic flight to safety. This situation brings uncertainty, echoing the 35-day shutdown from late 2018, which led to unpredictable market swings. Derivative traders should prepare for increased volatility and adjust their positions accordingly in the coming weeks.

Gold as a Safe Haven Asset

Gold’s rise to nearly $3,850 per ounce marks its best month since the US debt ceiling crisis of 2011, solidifying its status as a key safe-haven asset. Given this strong trend, buying call options on gold futures could help capitalize on further gains while managing downside risk. We expect this demand to stay as long as political gridlock continues in Washington. The unexpected decline in South Korea’s service sector raises alarms for Asian markets. This is worsened by new data showing South Korea’s exports fell 8.4% year-over-year in August 2025, signaling a broader economic slowdown. Traders might consider buying put options on the KOSPI 200 index or taking short positions on the Korean Won. Uncertainty surrounding the Bank of Japan’s policies is keeping the yen weak, pushing the USD/JPY above 148.50. While this trend seems stable, we must remember that Japanese authorities heavily intervened to support the yen when it exceeded the 150 mark back in 2023. A straddle strategy, using both call and put options, could effectively manage potential large moves without betting on a specific direction. Bitcoin is holding steady above $114,000, with markets looking forward to a typically strong “Uptober,” historically showing positive returns about 70% of the time. However, this optimism is tempered by the upcoming US Non-Farm Payroll report, which could bring volatility. Implementing option spreads to create a bullish position with limited risk is a wise strategy in this case. The Federal Reserve’s dovish stance adds complexity, putting downward pressure on the US dollar. Notably, during the last 12 government shutdowns since 1976, the S&P 500 was higher at the end of the shutdowns eight times. This suggests that any market panic may be temporary, and dollar weakness might not be a lasting trend. Create your live VT Markets account and start trading now.

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