South Korea’s Consumer Price Index (CPI) increased by 2.4% year-on-year in October, exceeding expectations of 2.1%. This indicates that inflation may be stronger than previously thought. The Reserve Bank of Australia is expected to keep the Official Cash Rate steady at 3.6% in its upcoming November meeting. The announcement will also include a Monetary Policy Statement and quarterly forecasts, followed by a press conference from Governor Michele Bullock.

Euro and Dollar Movements

EUR/USD has dropped for four days straight and is now near the 1.1500 support level. This decline reflects the dollar’s recovery as traders assess the outcome of the Federal Open Market Committee meeting. GBP/USD is stable, hovering around the 1.3150 level, though a price rebound is expected soon. Traders are cautious as they anticipate interest rate decisions from the Bank of England. Gold prices fell approximately $4,000 during the early Asian session on Tuesday. Traders are reevaluating their expectations for future Federal Reserve rate cuts, considering upcoming speeches and economic data. Risk sentiment hasn’t fully improved despite hopes for Fed rate cuts and trade peace talks. The strength of the dollar could be challenged by upcoming Federal discussions, decisions from the US Supreme Court, and economic reports.

Cryptocurrency Market Sentiments

Cardano (ADA) dropped 6% on Monday, trading below $0.58, following a 10% decline the previous week. Increased short positions and lower on-chain activity suggest a bearish outlook in the market. Remember when South Korea’s 2.4% CPI was surprising? Back then, it was a significant figure. Now, October 2025’s inflation is even higher at 2.9%, raising concerns for the Bank of Korea. This suggests that volatility in Asian currency pairs may continue, prompting traders to consider options strategies to protect against unexpected policy shifts. Looking back, the struggles around the 1.1500 level for EUR/USD feel like a different market cycle. With the Federal Reserve maintaining rates in the 5.00-5.25% range throughout most of 2025 and the pair currently around 1.0650, the dollar’s strength is evident. Traders are using bearish options, like buying puts on the Euro, betting that the European Central Bank will need to cut rates before the Fed. The GBP/USD battle at 1.3150 once reflected a different economic outlook. Now, as it struggles to stay above 1.2200, the focus is on the Bank of England’s hesitation to signal any easing of policies. This divergence from the Fed’s “higher for longer” stance keeps the pound pressured, leading traders to take short positions on GBP futures in the coming weeks. Expectations for the Reserve Bank of Australia to hold the cash rate at 3.6% belong to a different monetary policy era. Now, the cash rate is 4.35% as the RBA grapples with persistent inflation, which its latest report confirms is above target. This has created opportunities in interest rate swaps as traders speculate on how long the RBA can maintain this tight stance into 2026. That time gold peaked at $4,000 was driven by strong hopes for rate cuts that didn’t happen. Today, with high interest rates offering a solid yield on cash, gold has settled around $2,450 an ounce. The metal is highly sensitive to Fed speeches, so any signal of a policy change could trigger sharp moves, making straddle or strangle options strategies attractive. When Cardano dropped below $0.58, it was seen as a major bearish sign for the altcoin market. Since regulatory frameworks solidified in 2024, ADA has found more stability and is now trading near $0.85. However, trading volume remains low compared to its peers, suggesting traders should be cautious with leverage and consider funding rates in perpetual futures for sentiment insights. Create your live VT Markets account and start trading now.

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