Insights 
VT 
Australia’s Producer Price Index rose to 3.5% year-on-year for the third quarter, up from 3.4%.
The EUR/USD pair is cautious, trading around 1.1570 as the US Dollar remains strong due to easing Federal Reserve dovish bets and improved US-China trade relations. GBP/USD shows a slight increase after recent declines, trading at about 1.3160. This comes as the US Dollar faces headwinds amid improved Federal Reserve rate cut forecasts, with market expectations for a December cut rising to 71% from 66%.
Gold’s Challenges with US Dollar Strength
Gold finds it challenging to take advantage of minor gains because of a mixed fundamental environment. The US-Dollar’s strength, bolstered by the Fed’s firm stance and US-China trade optimism, limits the XAU/USD pair’s potential growth.
Meme coins like Dogecoin, Shiba Inu, and Pepe suffer considerable losses in the current cryptocurrency market downturn. These coins are testing crucial support levels, facing the potential for further declines if overall market sentiment continues to wane.
The meeting between Trump and Xi brought no surprises following a weekend framework deal. China reduced Fentanyl-related tariffs, while Trump achieved the resumption of soybean exports and delayed Chinese export controls by a year.
We are seeing the US Dollar trade firmly as expectations for a dovish Federal Reserve pivot are pushed back. The latest US CPI data from mid-October 2025 showed inflation holding stubbornly at 3.1%, keeping pressure on the Fed to maintain its current policy rate. This environment suggests that option strategies betting on continued dollar strength, such as buying dollar calls, could be favorable.
EUR/USD and GBP/USD Under Dollar Pressure
This strength in the dollar is keeping the EUR/USD pair pinned near its recent lows around 1.1570. The European Central Bank’s own policy rate, currently at 3.5%, creates a significant yield advantage for holding dollars, which is weighing on the pair. Traders might consider bearish positions, possibly using put options to limit risk while targeting further downside.
While GBP/USD is showing some minor stability around 1.3160, any upward moves seem limited by the dollar’s dominance. Despite some pockets of the market pricing in a 71% chance of a Fed rate cut, the strong September 2025 jobs report of 220,000 new jobs suggests the economy can handle higher rates for longer. This mixed signaling implies that volatility in the pair could increase, making straddles or strangles a potential strategy.
In Australia, the latest Producer Price Index figures for the third quarter of 2025 came in at 3.5%, a slight increase from the previous quarter. This persistent inflation could force the Reserve Bank of Australia to maintain its own restrictive stance. This may offer some support for the Aussie dollar against currencies with more dovish central banks, but it will likely struggle against the US dollar.
Gold is struggling to find direction as the hawkish Fed stance makes the non-yielding metal less attractive. A strong US dollar and US Treasury yields hovering near 4.5% create a significant headwind for XAU/USD. This suggests that selling call options on gold could be a viable strategy to gain from sideways or downward price action.
Looking back, we remember the trade deal framework between Trump and Xi several years ago, which provided temporary market relief by easing tariff concerns. However, current US-China relations remain a source of uncertainty, which is contributing to the dollar’s safe-haven appeal. This backdrop limits the upside for riskier assets tied to global trade.
In the crypto space, the sell-off in speculative assets like Dogecoin and Shiba Inu is accelerating. This move is consistent with a broader risk-off sentiment, as higher interest rates draw capital away from volatile assets toward safer, yield-bearing investments. We saw a similar pattern during the sharp market downturns of 2022, where highly speculative coins suffered the most significant losses.
