In September, China’s NBS Manufacturing PMI reached 49.8, better than the expected 49.6. This shows a small improvement from earlier predictions, but it’s still below the 50 mark, which indicates growth. In the currency market, the AUD/USD pair stayed strong, holding above 0.6600 during Asian trading. This comes as the Reserve Bank of Australia’s cautious stance on further easing becomes clear after its latest policy meeting.

Gold’s Remarkable Performance

Gold is set for its best month in 14 years, nearing a record high of about $3,850. This rise is due to an ongoing move towards safe assets amid concerns about a potential partial US government shutdown. The USD/JPY exchange rate held steady above 148.50 as the Bank of Japan’s Summary of Opinions fuels discussions about interest rate hikes. Cardano (ADA) bounced back after hitting a key support level, trading close to $0.80. Recent interactions between the US SEC and Exchange-Traded Fund issuers didn’t significantly boost ADA, which remained stable. The Chinese manufacturing PMI of 49.8, although below the 50-point mark, shows improvement and exceeds expectations. This is encouraging as it marks the third consecutive monthly increase from June 2025’s low of 48.2. It suggests that investors may become more bullish on China-related stocks and industrial commodities like copper.

Market Reactions to Economic Trends

This slight strength in China directly supports the Australian Dollar, which is maintaining its position above 0.6600. The Reserve Bank of Australia’s choice to keep rates at 3.6% strengthens this support, as iron ore prices have already risen to over $130 per tonne this month. Traders might consider strategies that take advantage of AUD’s strength, especially against currencies from central banks that are more cautious. In the US, the risk of a government shutdown is pushing gold towards its best month in over ten years, with prices nearing $3,850. We recall a similar move towards safe assets during the 2018-2019 shutdown, with the CBOE Volatility Index (VIX) climbing to 22.5 this week, reflecting market unease. Traders may look at long volatility positions and call options on gold as a hedge against potential political instability. The Federal Reserve’s tendency towards a softer approach is leading to a weaker outlook for the US dollar, with Fed funds futures now suggesting less than a 10% chance of another rate hike in 2025. This contrasts with the Bank of Japan, where uncertainty around policy changes is weighing on the Yen. This difference supports long USD/JPY positions, but traders should be alert for any unexpected hawkish signals from the BoJ. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now