The participation rate in New Zealand decreased to 70.3% in the third quarter from the previous 70.5%. This change reflects a slight shift in workforce engagement within the country.

Currency And Commodities Update

Gold experienced a marginal increase amidst concerns of a potential US government shutdown. Meanwhile, the People’s Bank of China set the USD/CNY reference rate at 7.0901, a slight adjustment from 7.0885.

The AUD/USD currency pair remained stable near 0.6450 after the release of China’s PMI data. Similarly, EUR/USD held steady near 1.1500 amid cautious sentiment regarding the European Central Bank’s policy outlook.

China’s services PMI fell to 52.6 in October, aligning with expectations. US President Donald Trump indicated progress on tariff disputes after meeting with Swiss officials.

In the Forex market, the GBP/USD saw a notable decline, breaking below the 1.3100 handle. Concurrently, gold’s value dropped below $3,850, with market pressures influenced by the US Dollar’s performance.

Cryptocurrency And Financial Sentiment

Ethereum’s price dipped below $3,500, partly due to ETF outflows impacting the crypto market. Risk sentiment in financial markets faces potential challenges from upcoming US data and central bank meetings.

The US Dollar’s strength seems set to continue, making it a difficult currency to bet against. We just saw the October 2025 non-farm payrolls come in solid at 190,000, and with core inflation still hovering around 3.4%, the Federal Reserve has little reason to signal rate cuts. This sustained “higher for longer” stance is fueling the dollar’s momentum.

We see significant weakness in the British Pound, which has been in a clear downtrend against the dollar for weeks. The Bank of England is in a tough spot, as last quarter’s GDP data showed the economy barely grew by 0.1%, raising fears of a recession. This policy divergence with a hawkish Fed makes shorting GBP/USD a compelling strategy, and using options to buy puts could limit risk while capturing further downside.

The New Zealand dollar looks vulnerable after the participation rate slipped to 70.3%, signaling a cooling labor market that may force the Reserve Bank of New Zealand’s hand. Similarly, the Aussie dollar is feeling the pressure from China’s sluggish recovery, with the latest manufacturing PMI from October 2025 staying below the 50 mark, indicating contraction. This environment favors bearish positions on both AUD/USD and NZD/USD.

For the Euro, we are seeing a period of consolidation as the European Central Bank holds a cautious line. While recent Eurozone inflation came in at 2.9%, just below expectations, the ECB seems hesitant to pivot to rate cuts just yet. This creates uncertainty, suggesting traders could use options strategies like strangles to play potential volatility breakouts in EUR/USD rather than betting on a clear direction.

Gold is struggling to find its footing, feeling the direct pressure of the strong US Dollar and high interest rates. With the 10-year US Treasury yield holding firm above 4.5%, the opportunity cost of holding non-yielding gold is significant. We expect gold to remain under pressure as long as the market believes the Fed will stay on hold.

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