New Zealand’s Consumer Price Index (CPI) rose by 3.0% year-on-year in the third quarter, meeting expectations. This indicates stable consumer inflation in the area. In the cryptocurrency market, liquidations topped $1 billion in just 24 hours. BNB, Solana, and Cardano each fell by more than 10%, marking significant losses among leading cryptocurrencies.

Currency Market Overview

The EUR/USD rate fell to daily lows around 1.1650 as the US Dollar strengthens. Meanwhile, the GBP/USD is facing downward pressure, staying close to the 1.3400 support. Gold price soared to a new high above $4,370. However, discussions on trade between the US and China could impact future market movements, along with the upcoming US inflation data for September. Next week is busy with important reports, including the US CPI and PMI data, as well as UK inflation numbers. These will likely affect predictions about central bank interest rate changes in various economies. Around $1 billion in liquidations occurred in the crypto markets, with top cryptocurrencies like BNB, Solana, and Cardano dropping over 10%, the largest declines seen.

New Zealand Dollar and Market Strategies

With New Zealand’s inflation hitting the 3% mark, the Reserve Bank of New Zealand is unlikely to implement aggressive rate hikes. This suggests that the strength of the New Zealand Dollar may have limits. We could use options to bet on stability or a small decline, like selling out-of-the-money NZD call options. The US Dollar is gaining strength as a safe-haven asset amid geopolitical uncertainties, putting pressure on currency pairs like EUR/USD and GBP/USD. We expect significant swings around the upcoming US inflation data. Recent reports from the Bureau of Labor Statistics show core inflation stubbornly above the Fed’s 2% target. Using straddles on major currency pairs could help us profit from the anticipated high volatility, regardless of direction. Gold’s price jumped to over $4,370 an ounce, followed by a sharp 2% drop, highlighting its sensitivity to news about US-China trade relations. We remember similar extreme fluctuations during the trade disputes of 2019. The implied volatility for gold options seems to be at multi-year highs, suggesting that strategies like buying put or call spreads could be a smart way to trade while limiting potential losses. The stock market is trying to rise, but we need to safeguard our portfolios against the geopolitical risks affecting currencies and gold. The CBOE Volatility Index (VIX) has risen from below 14 earlier this month, indicating growing fear among investors. We believe it’s wise to buy protective put options on major indices like the S&P 500 as a hedge against a sudden market drop. Create your live VT Markets account and start trading now.

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