Australia’s S&P Global Composite PMI increased to 52.6 in October, up from 52.4. This signals a slight rise in purchasing activity. The PBOC set the USD/CNY reference rate at 7.0928, down from 7.1235. Japan is considering changes to its financial income tax, but no decisions have been made yet.

US Dollar Index Performance

The US Dollar Index recorded minor losses, remaining below 99.00. Traders are paying close attention to US CPI inflation data, which affects currency pairs like NZD/USD and USD/JPY. In September, Japan’s national CPI rose by 2.9% year-on-year, along with a predictable increase in core CPI. The EUR/USD pair stayed steady around 1.16, with slight dollar gains, ahead of the upcoming US inflation data. GBP/USD has dropped for five consecutive trading days, hovering around the 1.3300 level, facing resistance at the 50-day Exponential Moving Average. Gold prices remain stable at about $4,150 per troy ounce, as traders await the US CPI data amid mixed market conditions.

Ethereum Whale Activity

Ethereum whales have accumulated more than 200K ETH, bringing their total holdings to 22.31 million. Despite the market’s ups and downs, this group is increasing its assets. Japan’s new Prime Minister, Sanae Takaichi, is working to stabilize the Yen. Concerns about mismatches in fiscal and monetary policy continue. The price of Aster has slightly risen, trading above $1.00. Positive sentiment in the cryptocurrency market has also boosted Bitcoin and Ethereum prices. The rise in Australia’s composite PMI to 52.6 suggests that the economy is holding strong, which may prevent the Reserve Bank of Australia from lowering interest rates. This could indicate support for the Australian dollar in the weeks ahead. Traders might consider strategies that benefit from a stable or strengthening AUD, such as selling out-of-the-money put options on the currency. Market activity is quiet as we await the US Consumer Price Index (CPI) inflation data. Recent economic releases from September 2025 indicated that core inflation remains stubbornly high at 3.5%. We are preparing for another release that could influence the Federal Reserve’s decisions. Any number suggesting that inflation is not decreasing could trigger significant volatility in stocks, bonds, and currencies. We recall the sharp market declines following high inflation reports in 2023 and 2024. During that time, even a small increase in inflation expectations caused the US Dollar Index to soar while equity futures dropped. With this experience in mind, we are adopting a defensive stance, using VIX call options to hedge against potential market shocks. With the USD/JPY surpassing 152.50, the political shift in Japan adds more uncertainty. There are concerns that Prime Minister Takaichi’s policies may lead to increased fiscal spending, which could weaken the yen further. This divergence in policy compared to the US enhances the appeal of long positions on the USD/JPY pair, possibly through futures or options contracts. Gold prices are consolidating around $4,150 an ounce, serving as a gauge for market anxiety ahead of the US inflation numbers. Gold’s price is highly sensitive to real yields. A surprisingly low inflation figure could push gold prices higher, indicating less aggressive central bank policies. We are considering collar strategies on gold ETFs to safeguard our existing holdings while allowing for potential upside. The crypto market remains notably strong, with Bitcoin trading above $109,000, even as traditional finance remains cautious. We are noticing significant accumulation by Ethereum whales, as large wallets are increasing their holdings near the $3,800 mark. This robust demand hints that any broader market decline triggered by the CPI data might be seen by crypto traders as a buying opportunity. Create your live VT Markets account and start trading now.

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