Insights 
VT 
South Korea’s foreign exchange reserves increased to $428.82 billion in October from $422.02 billion previously. This change highlights a notable growth in the nation’s financial holdings.
Elsewhere, major global currencies are experiencing fluctuations. The NZD/USD fell below 0.5650 due to New Zealand’s unemployment rate reaching a nine-year high. Meanwhile, GBP/USD has dropped to new lows, while USD/JPY declined near 153.50 amid concerns about a US government shutdown.
Us China And Swiss Trade Developments
US President Donald Trump announced progress in discussions with Swiss officials regarding tariffs. Additionally, a formalisation of fentanyl regulations and tariff reductions features in a US-China agreement.
The EUR/USD remains low near 1.1480. Gold prices have eased to three-day lows of approximately $3,930, and Ethereum’s price dipped below $3,500 due to ETF outflows.
In the financial sector, scrutiny on DeFi platforms follows a $120 million Balancer hack. Information presented bears inherent risks and uncertainties, and it is intended for informational purposes only, not as advice. It’s crucial for readers to conduct thorough research before making any investment decisions as risks, losses, and costs are the investor’s responsibility.
We are seeing a market pulled in two directions, creating opportunities for volatility trades. The positive US-China trade deal and progress on Swiss tariffs are being offset by growing fears of a US government shutdown, which is putting pressure on the dollar. This tension suggests strategies like straddles or strangles on major indices could be effective in the coming weeks.
Investment Opportunities And Risks
The Japanese yen is strengthening significantly as a safe-haven asset, with USD/JPY dropping toward 153.50 despite the good trade news. This move is fueled by the shutdown risk, which the CBO last week estimated could shave 0.2% off Q4 GDP for every week it lasts. We should consider buying JPY call options or selling USD/JPY futures to ride this momentum, especially if Congress fails to signal progress on a budget resolution.
The British pound is in a clear downtrend, and we should look to capitalize on its weakness. The plunge to new lows follows last week’s UK inflation data, which came in at just 2.1%, missing expectations and reducing the likelihood of a Bank of England rate hike before mid-2026. Put options on GBP/USD or bearish futures positions appear to be the most straightforward plays here.
Similarly, the New Zealand dollar looks vulnerable after its unemployment rate hit a nine-year high of 5.2%. This has effectively taken any rate hikes off the table for the foreseeable future, a sentiment echoed by the RBNZ governor’s dovish comments yesterday. We see potential in shorting NZD/USD, as the currency has very little positive news to support it right now.
The Bank of Japan’s increasingly hawkish tone adds another layer of strength for the yen. With their minutes confirming a willingness to hike, and Japan’s core inflation holding above their 2% target for the sixth straight month in October, the policy divergence with other central banks is clear. This supports a longer-term bullish view on the yen against currencies like the euro and the pound.
Gold is pulling back from its recent highs near $3,930, suggesting some traders are rotating out of safety and into riskier assets following the trade deals. In the crypto space, sentiment is decidedly negative, with Ethereum dipping below $3,500 after institutional crypto ETFs recorded over $500 million in outflows last week. The recent $120 million DeFi hack is only adding to the uncertainty, making bearish derivative plays on crypto-exposed assets look attractive.
