India’s trade deficit for October hit $41.68 billion, far exceeding the expected $29.4 billion. This indicates that changes in imports or exports have affected the country’s financial balance. The US Dollar has regained strength, affecting currency pairs such as EUR/USD and GBP/USD. The EUR/USD pair dropped below 1.1600 as expectations for a Federal Reserve rate cut in December faded, influencing market sentiment.

Currency Movements

GBP/USD has seen slight growth but remains below 1.3200 due to concerns over the UK’s finances. Meanwhile, gold is stabilizing at around $4,000 per troy ounce, as market players rethink their views on Federal Reserve policies. Cryptocurrencies like Bitcoin, Ethereum, and XRP are attempting to recover. Bitcoin is now trading above $95,000, while Ethereum stays under $3,200, and XRP hovers around $2.27, showing signs of a subtle recovery. In the stock markets, the week starts with a stable atmosphere. US stock futures predict slight gains, and European indexes show minimal changes. The Pi Network’s price, boosted by new updates to the Pi App Studio, is above $0.2200, indicating a steady recovery. The Indian trade deficit for October 2025 is alarmingly high at $41.68 billion, far surpassing the $29.4 billion forecast. This marks a record deficit, significantly exceeding the previous peak of about $30 billion in 2022 and putting pressure on the Indian Rupee. Consequently, we should consider going long on USD/INR futures or buying out-of-the-money call options to profit from the potential further decline of the INR.

Impact of US Rates

With the market now expecting no rate cut from the Fed in December 2025, the US Dollar is strengthening. Current futures market pricing shows the probability of a rate cut has dropped from over 60% last week to under 25% today, driving this dollar rally. With the EUR/USD pair breaking below the 1.1600 level, buying put options on the Euro appears to be a worthwhile opportunity. This shift in sentiment about US rates is also posing challenges for Gold, which is struggling to remain above $4,000. Higher US interest rates for a longer period raises the opportunity cost of holding gold, a trend that suppressed prices during the 2022 rate-hiking cycle. Therefore, we are cautious about long positions and may consider selling call options against our existing holdings to collect premium. Create your live VT Markets account and start trading now.

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