Japan’s Tokyo CPI (Consumer Price Index), excluding food and energy, rose to 2.8% year-on-year in October, up from 2.5% last month. The EUR/USD pair saw some buyers during the Asian session, ending a two-day drop and trading near key support levels between 1.1550 and 1.1540, around 1.1575.

Currency Fluctuations

The GBP/USD continued to decline, approaching 1.3100 and hitting a six-month low at 1.3116. The Pound dropped over 2% against the US Dollar in October. Gold remained steady above $4,000 early Friday, looking to achieve its third consecutive monthly gain. The US Dollar rose to two-month highs as hopes for a December rate cut faded. Bitcoin traded below $109,000 after a nearly 5% drop over the week. Ethereum and Ripple also fell, correcting around 8% and 7%, respectively, as they approached important support levels. The agreement between Trump and Xi included reducing Fentanyl tariffs and restarting soybean imports from the US, with some export controls being delayed. Zcash held its upward trend, trading at about $360. The token has been climbing despite the volatility in the cryptocurrency market. Tokyo’s core inflation reached 2.8%, showing ongoing price pressures not seen in decades. This follows last week’s report of national wage growth hitting a 30-year high of 3.1%, prompting the Bank of Japan to consider policy changes. Traders should be alert for signs of a shift away from negative interest rates that could strengthen the yen.

Market Analysis

The strength of the US Dollar is backed by solid data, with the latest Personal Consumption Expenditures (PCE) inflation report for September 2025 showing a high 3.5%. This puts the Federal Reserve in a position to maintain higher rates longer, reducing expectations for a rate cut this year. Meanwhile, Eurozone inflation has cooled to 2.1%, and the UK’s Office for Budget Responsibility has lowered its growth forecast, suggesting that both EUR/USD and GBP/USD may continue to decline. Gold staying above $4,000 despite a strong dollar indicates that traders are buying it as a safe investment amid global tensions. This reflects a flight to safety, with investors seeking a reliable store of value while central banks combat inflation. This situation mirrors the late 1970s, when gold performed well despite high interest rates. Bitcoin’s drop below $109,000 is driven by more than just technical factors; regulatory uncertainty is once again a concern in the US. The SEC’s recent decision to postpone rulings on key Ethereum spot ETFs until 2026 has significantly affected market sentiment. This cautious atmosphere is also heightened by high government bond yields, with the US 10-year Treasury providing a competitive, low-risk return over 5.2%. While the recent US-China trade agreement alleviates some minor uncertainties, it doesn’t alter the broader risk environment influenced by central bank policies. This is why some assets, like Zcash, are rising independently due to their unique privacy narratives. Traders should be careful not to mistake these isolated strengths for a general market rally. Create your live VT Markets account and start trading now.

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