New Zealand’s ANZ Commodity Price Index rose to -0.3% in October, up from -1.1% in September. This change shows a shift in commodity prices during the month. The US Dollar Index dropped to around 100.00 because of an ongoing US government shutdown. Gold is now trading near $3,950 in Asia, bouncing back from a 1.80% drop on Tuesday. The Australian dollar gained strength after China announced it will remove tariffs on US agricultural goods starting November 10. The USD/INR stayed above 88.50 due to low trading volume caused by an Indian bank holiday. Bitcoin fell below $100,000, leading to $2 billion in liquidations. Despite the broader market downturn, platforms like ZKsync and Internet Computer remained steady. Balancer, a DeFi platform, suffered a $120 million hack, unable to stop the attack due to outdated pools. The cryptocurrency market is still facing security issues, even as decentralized finance grows. The ongoing US government shutdown has weakened the US Dollar considerably. This situation is similar to the 35-day shutdown from 2018-2019, which also impacted the economy and the currency. Traders might want to look for strategies that benefit from a weak dollar, such as buying call options on safe-haven assets like gold. Gold is approaching $4,000, driven by market safety and a weak dollar. This increase is supported by a long-term trend of central bank purchases. Data shows that central banks bought a record 1,078 tonnes of gold in 2022, with strong buying continuing into 2024. This demand suggests that any dips in gold prices might be good buying opportunities for traders. In the commodity currency market, we see a clear divide. The Canadian dollar is weakening, with WTI crude oil prices dropping below $60 a barrel, pushing USD/CAD to seven-month highs. Meanwhile, the Australian dollar benefits from China’s decision to lift some agricultural tariffs, boosting regional risk sentiment. This creates potential trading opportunities, such as going long on AUD/CAD. Although New Zealand’s commodity price index improved slightly, it remains negative, suggesting the Kiwi may not recover as quickly as the Aussie. Therefore, taking long positions on the Australian dollar against its commodity peers seems favorable. The British Pound is sharply declining, disconnected from the broader focus on the US dollar. UK inflation rates have remained around 4%, twice the Bank of England’s target, raising fears of stagflation and hurting the currency. This suggests that put options on GBP/USD could be a useful hedge against further sterling weakness. The overall market sentiment is negative, evidenced by the drop in cryptocurrencies, particularly Bitcoin falling below $100,000. This movement away from speculative assets highlights a focus on capital preservation. Traders should stay cautious, as the political situation in the US may lead to increased market volatility in the weeks ahead.

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