Insights 
VT 
In September, Brazil’s industrial output grew by 2% year-over-year, an improvement from the previous -0.7%. This increase comes amidst a backdrop of currency dynamics and fiscal decisions impacting global markets.
Other economic movements include the USD/JPY declining due to a stronger yen, and Gold facing pressure due to a firm US dollar and cautious Federal Reserve outlook. Meanwhile, the GBP/USD has hit a seven-month low, driven by deepening UK fiscal concerns. The AUD/USD also fell as the RBA maintained its rate pause amidst a strengthening US dollar.
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In the broader market, privacy coins like Dash and ZCash are defying trends, surging despite a wider crypto market correction. The market saw a brief rise in privacy coin market capitalisation, crossing $25 billion. Additionally, the DeFi sector faced scrutiny after a $120 million hack affected Balancer, a decentralized exchange.
The upcoming week hints at potential challenges as risk sentiment could be impacted by central bank meetings, including that of the US Federal Reserve. The dynamics between central bank decisions and currency performance remain pivotal as markets navigate ongoing economic fluctuations.
Given the strength of the US dollar, we see continued opportunities in playing this trend. Recent US inflation data for October 2025 came in at a stubborn 3.4%, reinforcing the market’s belief that the Federal Reserve will not be cutting rates soon. We think traders should consider buying call options on the dollar index (DXY) or shorting EUR/USD futures, as the Euro remains under pressure below the 1.1500 level.
The British pound looks particularly vulnerable, and we anticipate further downside. UK fiscal concerns have been amplified by the Office for Budget Responsibility’s recent upward revision of its borrowing forecast, which is weighing heavily on the currency. Buying put options on GBP/USD could be a direct way to position for a drop toward the 1.3000 mark.
Japanese Yen Performance Highlights Market Dynamics
Conversely, the Japanese yen is showing signs of life after years of weakness. The Bank of Japan’s hawkish tone is being backed by its tolerance for the 10-year JGB yield to trade above 1.25%, a significant policy shift from what we saw in the early 2020s. We believe shorting USD/JPY futures or buying puts on the pair offers a good hedge against broad dollar strength.
This environment is creating headwinds for gold, which is struggling to find support. With a firm dollar and receding expectations for a Fed policy pivot, non-yielding assets are less attractive. We expect gold to remain under pressure, making selling gold futures or buying puts on the GLD ETF a viable strategy for the coming weeks.
Brazil’s positive industrial output figure presents an interesting counter-narrative. The 2% year-over-year growth for September 2025 is the strongest reading we have seen all year, suggesting a potential decoupling from the broader global slowdown. For traders looking for diversification, we believe long positions in Brazilian assets, perhaps through call options on the EWZ ETF, could offer upside.
