Insights 
VT 
In October, the UK’s GfK Consumer Confidence rose to -17, outperforming the forecasted -20. This suggests an improvement in consumer sentiment compared to previous expectations.
The FXStreet report also noted several market movements. Gold experienced a decline in light of upcoming US-China trade talks and US inflation data. Additionally, WTI oil prices dropped to around $61.00 due to existing supply concerns.
Forex Market Trends
Forex markets saw stabilisation with the EUR/USD remaining steady around 1.16. In contrast, GBP/USD faced a decline over five consecutive days. Meanwhile, the Australian Dollar held its ground following PMI data releases.
Cryptocurrency markets observed active whale accumulation in Ethereum, with significant holdings reported. Aster’s price saw a modest rise amid positive sentiment in the broader crypto market.
The article also mentioned the response in Japan to the appointment of Sanae Takaichi as Prime Minister. Market participants are considering the risks associated with Japan’s fiscal policies. Furthermore, the People’s Bank of China set the USD/CNY reference rate at 7.0928, marking an adjustment from the prior rate.
The surprise jump in UK consumer confidence to -17, beating the -20 forecast, is a positive internal signal for the pound. However, we’ve seen GBP/USD fall for five straight days, showing the market is more focused on the upcoming US inflation data. This suggests that any strength in the pound is being overshadowed by dollar positioning ahead of the main event.
US Inflation Impact
We are seeing gold prices soften towards $4,100 as the market braces for the US Consumer Price Index data. This is a classic move, as traders anticipate that a high inflation reading could force the Federal Reserve’s hand, strengthening the dollar. Given that the US inflation rate has hovered stubbornly around 3.8% for the last quarter, a surprise to the upside could cause significant volatility.
With EUR/USD holding steady near the 1.16 mark, the pair is clearly in a holding pattern ahead of the US inflation figures. The European Central Bank has maintained a more dovish stance compared to the Fed throughout 2025, which makes this pair particularly sensitive to any signs of persistent US price pressures. A break below the recent low of 1.1585 could signal a new downward leg, making put options an attractive hedge.
The WTI crude price holding firm around $61 despite a strengthening dollar points to significant underlying supply issues. We’ve seen OPEC+ maintain strict production discipline throughout 2025, a strategy reminiscent of their response to the price collapse back in 2020. This suggests that even if a hot US CPI report boosts the dollar, any dips in oil prices are likely to be short-lived and viewed as buying opportunities.
Given the market-wide anticipation of the US inflation numbers, we should consider using options to play the expected volatility. A straddle on currency pairs like EUR/USD or on a major index ETF would profit from a large price move in either direction. This allows us to position for a breakout without betting on the specific outcome of the data release.
