In October, South Africa sold a total of 55,956 new vehicles, up from 54,700 units the month before. This increase shows a positive trend in the automotive market.

Major Currency Movements

Major currencies have shown some changes, with the EUR/USD hovering near three-month lows, despite weak US manufacturing data. The GBP/USD is under pressure, close to its lowest point since April, due to worries about the UK’s financial situation. Gold prices have seen slight improvements, trading above $4,000 per troy ounce. The rising yields of US Treasury bonds seem to be affecting gold’s value. Meme cryptocurrencies like Dogecoin and Shiba Inu have lost value as investor interest wanes. Cardano’s price fell by 6%, trading below $0.58, with increasing short positions suggesting a negative outlook. In this economic climate, investors are cautious about risk, with potential pressures on the US Dollar’s strength from upcoming events. Notably, the Aussie dollar and the Pound are diverging ahead of next week’s central bank meetings.

Anticipated Economic Changes

With a strong US dollar, we expect continued pressure on major currency pairs in the coming weeks. The US ISM Manufacturing PMI for October showed a contraction at 48.7, but the dollar’s strength indicates that traders are more focused on interest rate differences than current manufacturing health. As Fed officials stay neutral about the next meeting, any hawkish remarks could push the dollar higher. We see potential opportunities by focusing on the differences between central banks, especially with the upcoming meetings of the Bank of England and the Reserve Bank of Australia. The pound is struggling around the 1.31 mark, weighed down by the same fiscal concerns that have emerged since the market turmoil in 2022. Using derivatives to bet on continued weakening of the pound against the dollar, like buying puts on GBP/USD, could be beneficial. In emerging markets, the South African economy is showing surprising strength. The new vehicle sales figure of 55,956 for October is a significant increase from about 45,000 units sold in the same month last year. This data suggests strong consumer confidence, positioning the rand to perform well against other commodity currencies like the Aussie dollar. The risk-off sentiment is most noticeable in speculative assets, warning us to be careful. Decreased interest from large investors in meme coins and rising short positions in assets like Cardano indicate a broad exit from high-risk investments. This shift aligns with gold maintaining a price above $4,000, reflecting the significant inflationary pressures we’ve faced in 2024. Looking ahead, volatility will be key, and options strategies may help manage risk around central bank announcements. Using straddles or strangles on GBP/USD and AUD/USD could capture sharp moves after their policy meetings. Additionally, the bearish trends in the crypto market might make shorting crypto futures or buying puts on related stocks worth considering. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now