New Zealand’s employment rate for the third quarter saw no change, registering at 0%. This was below expectations, which had forecasted a modest increase of 0.1%. Other economic developments include the People’s Bank of China setting the USD/CNY reference rate at 7.0901, compared to the previous 7.0885, and China’s services PMI dropping to 52.6 in October, aligning with predictions.
The EUR/USD currency pair showed resilience, trading near 1.1500, as market participants expected the European Central Bank to maintain a careful approach in its next meeting. In contrast, the GBP/USD experienced further losses, breaking below the 1.3100 mark and declining by around 0.9% in one session. Gold contended with price pressure below $3,850 amid a strengthening US Dollar, though lower US Treasury bond yields provided some support. Ethereum’s price slipped below $3,500 due to ETF outflows, mirroring the broader bearish sentiment in the cryptocurrency market.
Security Breach at Balancer
A recent security breach affected the Balancer platform, resulting in a loss exceeding $120 million. Despite knowledge of the vulnerability, the platform was unable to halt the hack as it involved older pools. Best Brokers in 2025 provided a detailed list and recommendations for traders considering various markets and platforms.
With New Zealand’s employment growth hitting zero, we see this as a clear sign of a stalling economy. This puts the Reserve Bank of New Zealand in a difficult position, as recent data from Stats NZ also showed that annual inflation remains stubbornly high at 4.2%. This weak growth and high inflation dynamic makes shorting the NZD/USD pair an increasingly attractive position.
The British Pound’s sharp fall below 1.3100 confirms a strong bearish trend that we have seen developing for weeks. The UK economy is struggling with growth that is tracking near 0.1% for the quarter, yet the Bank of England is unable to cut rates due to persistent core inflation. This backdrop suggests that buying put options on the GBP/USD could offer a way to capitalize on further expected weakness.
Impact on Australian Dollar
We are watching the Australian dollar closely as it struggles near 0.6450, directly impacted by signs of a slowdown in China. China’s recent services PMI, while still in expansion territory, has declined for two consecutive months, raising concerns about demand for Australian commodities. This reinforces a cautious outlook on the AUD, especially against the US dollar.
The Euro is holding near 1.1500, but we think its upward potential is capped by a cautious European Central Bank. The market has fully priced out any further rate hikes, with the latest ECB meeting minutes from October 2025 signaling a pivot towards potential cuts in the new year. This suggests a range-bound market for EUR/USD, making strategies that profit from low volatility, like selling strangles, worth considering.
Gold’s failure to push past $3,850, even with geopolitical risks simmering, highlights the overwhelming strength of the US dollar. After the significant run-up we saw over the past two years from the $2,000 level, momentum appears to be waning. We believe the precious metal is caught between supportive but declining US Treasury yields and a restrictive dollar, limiting its immediate upside.
In the crypto markets, Ethereum dipping below $3,500 is a warning sign driven by institutional profit-taking. We have observed consistent outflows from major Ether ETFs over the past three weeks, a sharp reversal from the heavy inflows seen after their approval in 2024. This suggests waning conviction among larger players, making protective puts a prudent strategy for those holding crypto-related assets.
