The Japanese Yen (JPY) has shown limited movement during the Asian trading session, despite favorable conditions for bullish traders. In October 2025, Japan’s Household Spending unexpectedly dropped by 2.9% year-on-year, marking the largest decline in almost two years. Still, expectations of an interest rate hike from the Bank of Japan (BoJ), along with comments from Governor Kazuo Ueda, continue to support the Yen. Additionally, Japan’s government bond yields remain high, partly due to Prime Minister Sanae Takaichi’s reflationary economic policies. Cautious sentiment in equity markets also enhances the JPY’s appeal as a safe haven. Meanwhile, the US Dollar struggles to gain traction after a slight recovery from its lowest point since late October. Positive labor market data from the US shows fewer planned job cuts and a decrease in unemployment benefit applications, yet the USD remains weak. The anticipated rate cut by the Federal Reserve keeps the USD/JPY pair close to a three-week low. Market participants are looking forward to the US Personal Consumption Expenditure (PCE) Price Index, as it will impact the Fed’s future rate decisions.

Technical Analysis And Outlook

From a technical perspective, the repeated failure to break above the 100-hour Simple Moving Average (SMA) suggests a potential decline for USD/JPY in the near term. On the other hand, any significant recovery could encounter resistance around the 155.40 region or the 100-hour SMA. A sustained move beyond this could lead to a short-covering rally, possibly pushing the pair towards the 156.00 mark. While technical indicators support a bearish outlook, caution is advised since oscillators show neutral signals. Any downward movement could find support near the mid-154.00 levels. The Japanese Yen (JPY) is affected by various factors, such as Japan’s economic performance, the policies of the Bank of Japan, and the yield difference with US bonds. The BoJ’s actions are crucial, as currency control is part of its responsibilities. The Yen is viewed as a safe-haven currency, attracting investments during uncertain times. Although the BoJ’s historically loose monetary policy has impacted the Yen’s value, recent shifts towards tighter policies provide some support. A narrowing yield differential between Japanese and US bonds due to changing monetary policies is also influencing the Yen’s strength. In turbulent times, the JPY is seen as a stable investment, strengthening against riskier currencies.

Monetary Policy Divergence

There is a notable policy divide opening up between the US and Japan. The Federal Reserve is expected to cut rates at its upcoming meeting, especially after last week’s Core CPI data for November showed a three-year low of 2.8%. This contrasts sharply with the Bank of Japan, which is hinting at a potential rate hike for the first time since 2007. Governor Ueda’s comments about considering a rate hike at the December 18-19 meeting are the most direct we’ve heard since the BoJ ended its negative interest rate policy in the spring of 2024. This has pushed 10-year Japanese government bond yields to their highest levels in over a decade. The shrinking yield difference between US and Japanese bonds puts pressure on the long-standing carry trade, which usually favors a stronger Yen. Despite this, the recent 2.9% decline in Japanese household spending raises concerns, which contributes to traders’ hesitance. This uncertainty, alongside the market’s anticipation of the upcoming US PCE inflation report, suggests that volatility could increase soon. We believe this consolidation phase presents an opportunity before the next major market move. For derivative traders, this situation favors positioning for a potential drop in the USD/JPY pair in the coming weeks. Purchasing put options with expiration dates after the December 19th BoJ meeting offers a clear pathway to profit from a possible rate hike. A more cautious approach would be to use a bear put spread, lowering the upfront cost while still benefiting from a move down towards the 154.00 level. It’s also essential to consider the risk that the BoJ may hold rates steady, which could trigger a sharp rally in USD/JPY. Recent data from the CME Group shows a notable increase in open interest for call options around the 156.50 strike price, indicating some traders are hedging against this outcome. A sustained move above the 155.40 resistance level could indeed lead to a short-covering rally. Create your live VT Markets account and start trading now.

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West Texas Intermediate (WTI), a key US crude oil benchmark, was around $59.45 in early Asian trading on Friday. This slight drop came after a reported increase in US crude oil inventories by 574,000 barrels last week, according to the Energy Information Administration. This rise contrasted with the previous week’s increase of 2.774 million barrels. The outlook for WTI prices suggests they may stabilize due to expectations of a quarter-point rate cut by the US Federal Reserve. The CME FedWatch tool indicates an 89% chance of this happening, which might weaken the US Dollar and potentially support WTI prices.

Geopolitical Tensions Impacting Supply

Geopolitical tensions are adding complexity to the situation. Attacks by Ukraine on Russian oil infrastructure could lead to supply issues. Specifically, attacks on the Druzhba pipeline in Russia’s Tambov region may have a significant impact on global oil supply and prices. WTI Oil is a light and sweet type of crude oil from the US, known for its low gravity and sulfur content. Prices are mainly influenced by supply and demand, geopolitical tensions, OPEC’s decisions, and the value of the US Dollar. Weekly inventory data plays a crucial role in shaping market views and prices. Currently, WTI crude is trading below $60. An unexpected increase in US oil inventories points to a potential oversupply, as the EIA reported a rise of 574,000 barrels last week, contrary to market predictions of a decrease. This negative inventory news is being balanced by strong expectations of a Federal Reserve rate cut.

Attention on Upcoming Fed Meeting

Next week, everyone’s eyes are on the Fed, with markets indicating an 89% chance of a rate cut. Recent economic data from November 2025 showed the US unemployment rate slightly increased to 4.1%, while core inflation fell to 2.8%. This allows the central bank some space to ease its policies. A rate cut could weaken the US Dollar, making dollar-denominated oil cheaper and potentially increasing demand. On the supply side, ongoing geopolitical tensions are likely to support prices. The recent Ukrainian attack on Russia’s Druzhba pipeline highlights how supply chains can face sudden disruptions. This event follows the latest OPEC+ meeting on November 30, 2025, where the group decided to keep its current production cuts through the first quarter of 2026, maintaining a tight market. The current situation mirrors late 2023, when concerns about an economic slowdown were offset by OPEC+ production cuts, resulting in a volatile but steady market. At that time, uncertainty about the Fed’s policy changes also caused sharp price fluctuations. This history suggests traders should be prepared for quick changes, especially with the $60 mark serving as a significant psychological threshold for WTI. The upcoming Fed meeting is expected to be a major catalyst, prompting derivative traders to get ready for possible spikes in volatility. In this environment, using options to manage risk—such as buying puts to safeguard long futures positions or creating spreads—could be a wise strategy. For those anticipating bigger price movements following the announcement, strategies like straddles could be employed to capitalize on the expected increase in volatility. Create your live VT Markets account and start trading now.

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The Reserve Bank of Australia (RBA) is likely to keep its cash rate at 3.60% until 2026, according to a Reuters poll. All 38 economists surveyed think the RBA will maintain this rate after its meeting on December 9. The poll shows a change in economic expectations. Last month, more than 60% believed the RBA would cut rates by mid-2024. Now, less than a third think so. Out of 33 economists predicting until 2026, 19 expect the rate to stay at 3.60%, 10 think there will be at least one cut, and four foresee an increase. The RBA affects the Australian Dollar (AUD) by setting interest rates and creating monetary policies. It uses methods, such as quantitative easing (QE) and tightening (QT), to manage these rates and support economic stability. Economic indicators, like GDP and employment data, influence the AUD’s value. QE typically weakens the AUD by increasing liquidity, while QT strengthens it by reducing liquidity. Currently, the AUD/USD pair rose by 0.01% to 0.6615. With a strong agreement that the RBA will keep the cash rate at 3.60%, lower market volatility is expected in the coming weeks. This is a big shift from last month when many anticipated rate cuts. The RBA meeting on December 9 is now viewed as likely to confirm this stable outlook. This expectation is backed by recent data showing a strong economy. The latest monthly CPI shows inflation at 3.5%, still above the RBA’s 2-3% target. The unemployment rate remains low at 4.1%, giving the central bank little reason to cut rates soon. For options traders, this suggests that implied volatility on Australian dollar options may continue to drop. Selling volatility may be a good strategy, such as using short strangles or straddles on the AUD/USD pair. These positions can be profitable if the currency stays within a narrow range, which seems likely without any surprises in interest rates. Globally, the RBA’s position contrasts with central banks like the U.S. Federal Reserve, where talks of rate cuts for mid-2026 are increasing. This difference in policy should support the Australian dollar. Traders might return to carry trades, where they borrow in lower interest rate currencies to invest in the higher-yielding Aussie. With AUD/USD trading near 0.6615, range-trading strategies seem the best option. Buying the Aussie on dips could be advantageous, given the favorable interest rate differential should help the currency hold its ground. However, without any rate hikes on the horizon, significant upward movement past recent highs seems unlikely in the near term.

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On Friday, the People’s Bank of China (PBoC) set the USD/CNY central rate at 7.0749, slightly up from the previous day’s rate of 7.0733. Reuters had predicted a rate of 7.0751. The PBoC aims to keep prices and exchange rates stable while supporting economic growth. It also focuses on financial reforms and the development of the financial market.

Ownership and Management

The PBoC is state-owned and not independent. Its management is influenced by the Chinese Communist Party Committee Secretary, who is appointed by the Chairman of the State Council. The PBoC uses various monetary policy tools, which differ from those in Western economies. These include the Reverse Repo Rate, Medium-term Lending Facility, foreign exchange interventions, and Reserve Requirement Ratio. The Loan Prime Rate serves as a key benchmark affecting loan and savings rates. China has 19 private banks, but they form a small part of the overall financial system. Notable digital lenders like WeBank and MYbank, backed by Tencent and Ant Group, are among the largest. Since 2014, the country has allowed privately funded domestic banks to operate within the financial sector. With the PBoC setting the USD/CNY reference rate at 7.0749, we see a continued acceptance of a gradual Yuan weakening. While not a drastic change, it aligns with the ongoing trend of a stronger dollar throughout most of 2025. For traders, this controlled depreciation indicates that betting against the Yuan is currently the easiest route.

Market Reactions

This adjustment appears to reflect recent economic data from China that supports a softer approach. The official manufacturing PMI for November 2025 was 49.8, indicating a second consecutive month of contraction and a sluggish factory sector. Along with slower-than-expected Q3 retail sales growth of just 2.5%, this gives authorities valid reasons to subtly use the exchange rate to encourage exports. Moreover, we must consider the increasing policy divide with the United States, where the Federal Reserve has held its policy rate at 5.0% to address ongoing core inflation, which was last reported at 3.1% for October. In contrast, the PBoC last lowered its key one-year Medium-term Lending Facility (MLF) rate to 2.40% back in September. This interest rate gap naturally puts upward pressure on the USD/CNY pair. Looking back, this situation resembles the pressures seen in 2023 when a strong dollar and concerns about China’s property market pushed the USD/CNY above 7.30. This past scenario suggests that while the central bank will prevent a chaotic decline, the underlying economic conditions can direct the currency in one direction for a long time. The PBoC is guiding the process rather than resisting the outcome. Given this steady and managed depreciation, traders should think about strategies that benefit from a slow rise in USD/CNY instead of sharp spikes. Buying call options on the pair for the first quarter of 2026 might capture this expected gradual increase. Because the central bank’s control limits daily fluctuations, implied volatility is relatively low, making these positions affordable to establish. Create your live VT Markets account and start trading now.

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The NZD/USD dropped to 0.5765 in early Asian trading, mainly due to a stronger US Dollar. Traders are looking forward to the US PCE inflation data, which will be released on Friday. Many expect the Federal Reserve (Fed) to lower interest rates by 25 basis points next week, which could offer slight support to the NZD/USD pair. The chances of a Fed rate cut next week have risen to 89%, up from 71% the week before. The Reserve Bank of New Zealand (RBNZ) recently reduced its Official Cash Rate to 2.25% and indicated that future adjustments will depend on economic conditions. Analysts believe New Zealand might pause further rate cuts, which may help the NZD against the USD.

US PCE Data and Its Impact

The upcoming US PCE inflation report is expected to show a 2.8% increase in headline PCE for September, with core PCE at 2.9%. If these figures are higher than expected, it could strengthen the USD, making it more challenging for the NZD/USD pair. New Zealand’s largest trading partner, China, significantly influences the Kiwi dollar, with its economic performance and dairy prices being crucial factors. The RBNZ targets an inflation rate of 1-3% and adjusts interest rates accordingly. A strong economy in New Zealand tends to boost the NZD, while shifts in overall market sentiment can alter its value—strengthening during positive periods. This article was written by Lallalit Srijandorn of FXStreet. As of December 5th, 2025, the NZD/USD pair is under pressure at around 0.5765. The market is primarily focused on the delayed US PCE inflation report for September, which is set to be released later today. This data is the final significant factor before the Fed’s interest rate decision next week. The main expectation is for the Fed to cut rates, with futures markets indicating an 89% chance of a 25-basis-point reduction. This sentiment has strengthened due to signs of a slowing US economy, such as last week’s job report, which revealed weaker job growth than anticipated. If today’s PCE reading is soft, it would likely confirm that the Fed will adopt a dovish stance.

RBNZ Policy Divergence

On the other hand, the RBNZ has indicated a pause in its rate-cutting efforts after lowering its rate to 2.25% last week. Recent data from late 2025 showed that New Zealand’s inflation remains somewhat stubborn, supporting the RBNZ’s decision to hold off on further cuts. This divergence in policies—where the Fed is becoming dovish while the RBNZ stays steady—could create a supportive environment for the Kiwi dollar. For derivative traders, today’s volatile PCE release can be managed using options strategies. A long straddle—buying both a call and a put option at the same strike price—could help profit from significant price changes in either direction. If the PCE data is much more positive or negative than the anticipated 2.8%, a notable movement is likely. As we look ahead, if the PCE data meets or falls below expectations, it could signal the chance to take long-term bullish positions on NZD/USD. Trading futures contracts to go long might capitalize on the expected Fed rate cut next week. Any decline in the pair after the data release could be seen as a buying opportunity. We should also monitor external factors affecting the New Zealand dollar. Recent purchasing managers’ index (PMI) data from China showed that its manufacturing sector is barely growing. Any further weakness or a drop in the Global Dairy Trade index could hinder the strength of the Kiwi. Create your live VT Markets account and start trading now.

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AUD/USD is currently sitting around 0.6600, close to a two-month high, as traders look forward to important US inflation data. Prices may keep rising, but traders are cautious and waiting for the US PCE figures to see if the upward trend will continue. The US Personal Consumption Expenditure (PCE) Price Index for October is due for release soon. This index, favored by the US Federal Reserve, could impact the USD depending on whether it suggests future interest rate cuts. Meanwhile, differences in policy expectations between the Fed and the Reserve Bank of Australia (RBA) support the AUD/USD pair.

Inflation and Monetary Policy

Recent US data shows the economy is cooling, with a weaker labor market. Some Fed officials anticipate an interest rate cut in December. Traders are betting on a 90% chance of a 25 basis point rate cut, which keeps the US dollar weak. RBA Governor Michele Bullock pointed out that inflation is still above the target of 2%-3%. Speculation around a possible rate hike supports the Australian dollar, benefiting AUD/USD. The Core PCE metric reveals price trends without the effects of food and energy prices. A higher reading could strengthen the USD by suggesting a change in Fed policy. As the US Federal Reserve is expected to cut rates next week, we see a clear policy divergence from the RBA. The latest US jobs report indicates a slowing economy, with only about 150,000 jobs added in November 2025. Meanwhile, inflation in Australia remains high at 3.8%, well above its target. This discrepancy suggests AUD/USD may continue to rise.

Trade Strategies Amid Data Releases

Today’s key event is the US Core PCE inflation report, the Fed’s preferred measure. We anticipate it will remain at 2.9%, reinforcing the case for a rate cut and putting further pressure on the US dollar. Looking back to late 2025, this 2.9% rate is a significant drop from the above 5% highs seen in 2022-2023, highlighting the success of disinflation. For traders confident that AUD/USD will keep rising, buying call options with expiries in January 2026 could be a smart move. This strategy allows us to benefit from a potential rise to 0.6700 or 0.6800 in the upcoming weeks. Options limit our risk to the premium paid, which is crucial due to possible short-term volatility around today’s data. Considering the uncertainty around the PCE numbers, another strategy is to trade the expected price movement itself. A long straddle, which means buying both a call and a put option with a near-term expiry, can profit if the data leads to a significant market move in either direction. This tactic isn’t focused on direction but on taking advantage of market reactions to this significant inflation report. Create your live VT Markets account and start trading now.

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Japan’s Finance Minister, Satsuki Katayama, said that interest rates are affected by “various factors.” The government plans to keep an eye on market trends and follow budget policies that are financially sustainable. Katayama mentioned working closely with the Bank of Japan ahead of its policy meeting in December. The USD/JPY exchange rate rose by 0.01%, reaching 155.15. The value of the Japanese Yen is impacted by Japan’s economy, the Bank of Japan’s (BoJ) policies, differences in bond yields between Japan and the U.S., and traders’ risk appetite. The BoJ helps manage the Yen’s value, often intervening to keep it lower. Since 2013, the BoJ has maintained a very loose monetary policy, causing the Yen to weaken against major currencies. A gradual shift from this policy starting in 2024 has begun to support the Yen. The wide gap in bond yields due to the BoJ’s loose policy has favored the U.S. Dollar over the Yen. Recent changes in BoJ policy and rate cuts from other banks are closing this gap. The Yen is viewed as a safe-haven currency, gaining strength during market turmoil. When stability is uncertain, investors often turn to the Yen, which boosts its value compared to riskier currencies. With no new guidance from Japan’s Finance Minister, all eyes are on the Bank of Japan’s key policy meeting later this month. The USD/JPY exchange rate remaining steady around 155 indicates that these comments were largely anticipated. The main takeaway is the uncertainty about the BoJ’s next move. This implies that implied volatility in yen-related options is likely to rise in the coming weeks. Traders should brace themselves for a significant price change since the market is considering a potential policy surprise. Positioning for this increased volatility before the event could be a smart strategy. Recent data shows Japan’s core inflation for October 2025 was still high at 2.4%, above the BoJ’s target. This creates pressure on the central bank to continue the policy normalization it started in 2024. We are eager to see if this pressure leads to a more aggressive approach. However, the large interest rate difference with the United States remains critical, as the U.S. Federal Reserve funds rate is around 4.0%, while Japan’s policy rate is just 0.25%. This gap has driven carry trades and kept the Yen weak, despite the ongoing policy adjustments. This fundamental tension presents trading opportunities. Given this scenario, we expect traders will buy straddles or strangles on USD/JPY options that expire after the BoJ’s December announcement. This strategy benefits from substantial price movements in either direction, whether the BoJ opts for a hawkish rate hike or unexpectedly holds steady. It directly plays on the uncertainty of the event. Alternatively, those betting on a stronger Yen might think about purchasing out-of-the-money JPY calls. We recall the sharp appreciation of the Yen following unexpected policy changes in the past, and some traders are anticipating a similar surprise. Such a move could catch many off-guard, leading to a quick exit from short positions in the Yen.

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**Gold Stabilizes Amid Rising US Treasury Yields** Gold is holding steady at around $4,205 during early Asian trading. This stability comes as US Treasury yields rise and strong employment data is released, which may limit gold’s gains as traders await the US PCE inflation report later today. US Initial Jobless Claims dropped to 191,000 for November 29, down from 218,000 the previous week and below the expected 220,000. This drop could strengthen the US Dollar, influencing gold prices that are based in USD. Traders are eagerly anticipating the US PCE inflation data for hints about the Federal Reserve’s future monetary policy. A 25 basis point rate cut is widely expected at the December meeting, which could benefit gold by lowering its opportunity cost. Geopolitical uncertainties, especially regarding Ukraine peace talks, might make gold more appealing as a safe-haven investment. Central banks, especially from emerging markets, are steadily increasing their gold reserves, achieving record high purchases in 2022. Gold prices typically move in the opposite direction of the US Dollar and fluctuate with interest rates and geopolitical stability. Therefore, changes in the Dollar’s strength significantly affect gold prices. **Anticipation for Fed Rate Decision** Gold remains stable around $4,205 as we await the PCE inflation report later today. Despite strong job data showing initial claims at only 191,000, the market is focused on next week’s Fed meeting, creating some tension for derivative traders heading into the weekend. The market is largely expecting a 25 basis point rate cut from the Federal Reserve next week, with an 85% probability priced in according to the latest CME FedWatch data. Such a dovish move would lower the opportunity cost of holding gold, providing a positive boost for the metal. Today’s PCE data is crucial. Forecasts suggest a slight decline in the core reading to 2.8% year-over-year. If the number comes in higher, we could see a quick drop in gold prices, though it might be brief as it challenges the Fed’s rate-cut narrative. On the other hand, a lower number could spark a strong rally. Recently, there’s been an increase in implied volatility for short-term gold options. This suggests traders are preparing for a significant price movement following the PCE announcement. Strategies that take advantage of this expected volatility, rather than just focusing on price direction, could be wise. It’s important to keep in mind that gold prices have more than doubled since the inflationary pressures in 2023 and 2024. Ongoing geopolitical uncertainty, especially concerning Ukrainian peace talks, signals that any dips from strong economic data could be seen as buying opportunities. Create your live VT Markets account and start trading now.

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Japan’s foreign reserves fell sharply in November, decreasing from $1,347.4 billion to $1 billion. This marks a significant shift in the country’s financial situation. This drop in reserves could impact Japan’s monetary policy and economic stability. Foreign reserves are crucial for maintaining the national currency and keeping inflation in check.

Market Expectations and Reactions

Market players may anticipate changes in monetary policy or new economic measures to handle this situation. Analysts will closely monitor how this development influences Japan’s economic outlook and future decisions by the central bank. With Japan’s foreign reserves nearly gone, we should brace for extreme market fluctuations. Implied volatility on USD/JPY options has likely reached levels not seen in decades as the market anticipates significant currency shifts. Our immediate attention should be on derivatives that can benefit from these unpredictable movements, given that the Bank of Japan has lost its main tool for stabilization. Without reserves to sell, there is little to prevent a sharp decline in the yen’s value. This contrasts with 2022 when Japan spent about $65 billion over a few months; recent data suggests expenditures of over $1.3 trillion in just one month. As a result, we are preparing for a much higher USD/JPY exchange rate by buying call options.

Impact on Financial Markets

This financial crisis will likely lead to a major decline in Japanese stocks. A falling currency and the ensuing economic chaos will drive investments out of the country, putting pressure on the Nikkei 225 index. We are setting up short positions with Nikkei futures and purchasing put options to hedge against, and profit from, a significant market drop. The Bank of Japan is now in a tough spot and may have to raise interest rates urgently to strengthen the yen. This makes trading derivatives that bet on rising Japanese Government Bond (JGB) yields a sensible move. We expect a dramatic shift in Japan’s debt market, which has been held down by years of easy monetary policies. Create your live VT Markets account and start trading now.

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Japan’s household spending dropped by 2.9% year-on-year in October. This was below the expected 1% increase and might affect economic forecasts. The People’s Bank of China set the USD/CNY reference rate at 7.0749, slightly up from 7.0733. Meanwhile, the NZD/USD pair weakened towards 0.5750, as traders awaited the US Personal Consumption Expenditures (PCE) inflation data.

AUD and Gold Market Dynamics

The AUD/USD pair stayed above 0.6600, close to a two-month high, before the US PCE data release. Gold prices remained steady near $4,200 due to rising US Treasury yields and strong US job figures. The US Federal Reserve has shifted its policy, possibly leading to a rate cut in December. This adds complexity for traders trying to understand the Fed’s reaction to economic changes. In the cryptocurrency market, Ripple (XRP) faced challenges, trading below key resistance levels. If negative sentiment continues, it may revisit recent lows. FXStreet highlights that investing carries significant risks and can cause emotional stress, urging cautious decision-making. All financial information is for informational use only and should not be taken as a trade recommendation.

US Dollar Weakness and Policy Implications

With the market’s focus on upcoming US PCE inflation data, this is seen as a crucial event. The market assumes there’s an 85% chance of a 25 basis point rate cut by the Fed this month, especially after last month’s core PCE reading of 2.5%. Derivative traders should think about strategies that could profit from a dovish surprise while also hedging against the possibility that the Fed does not cut rates. The US Dollar shows signs of weakness, which is why currencies like the AUD are near two-month highs. We believe the dollar is likely to weaken further, especially if the Fed confirms its dovish stance. We are considering strategies like buying puts on the US Dollar Index (DXY), which has struggled to stay above 98.00 after declining from its highs in 2022. In Japan, weak household spending at -2.9% supports our belief that the Bank of Japan will keep its very loose monetary policy. This creates a clear interest rate difference, making carry trades appealing in the coming weeks. We see continued value in using futures to maintain long positions in pairs like USD/JPY and AUD/JPY, a strategy that has worked well since the major policy divergence in 2022. Gold is trading at a record level near $4,200 an ounce, nearly doubling from its peaks in 2024. This high price indicates significant buying as a hedge, but it is also very sensitive to the upcoming PCE data and Fed decision. Given the uncertainty, we think using options straddles on gold ETFs is a smart way to trade expected volatility without committing to a specific direction. The Australian and New Zealand dollars are taking advantage of US dollar weakness, but we are monitoring China closely. The People’s Bank of China set the yuan’s reference rate lower, possibly in reaction to slowing demand, as indicated by November’s manufacturing PMI data, which showed a contraction at 49.8. Therefore, we recommend using collar options on the AUD/USD to safeguard long positions against any sudden risk-off sentiment. Create your live VT Markets account and start trading now.

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