Insights 
VT 
In October, New Zealand’s ANZ Business Confidence index increased, showing a rise from 49.6 to 58.1. This suggests a positive trend in the business climate as observed in these figures.
The Bank of Japan has decided to maintain its interest rate at 0.5%. This decision aligns with market expectations and reflects stability in their policy approach. Meanwhile, the Japanese Yen has weakened slightly following the announcement, with attention shifting to the subsequent press conference.
Foreign Exchange Movements
In foreign exchange movements, the EUR/JPY surged above 177.50, attributed to the Bank of Japan’s rate decision. The GBP/USD recovered to 1.3200 due to a slight weakening of the US Dollar, although analysts are cautious about further potential gains.
Gold is currently stabilising around $3,950 after experiencing some volatility. This movement is connected to recent Federal Reserve decisions and ongoing US-China trade discussions.
Cryptocurrency has seen notable activity, with altcoins like Official Trump, Pump.fun, and Zcash achieving double-digit gains. Additionally, the Pi Network is maintaining strength above $0.2600, marking its position for a potential breakout. These trends represent shifts in both the traditional and digital financial markets.
The significant jump in New Zealand business confidence to 58.1 is a strong signal for us to be bullish on the Kiwi dollar. This data supports the view that the Reserve Bank of New Zealand will maintain its high interest rate, which we know stands at 5.50% as of last month’s review. We should look at buying NZD call options or going long NZD futures, especially against currencies with dovish central banks.
Bank of Japan’s Monetary Policy
The Bank of Japan’s decision to hold its interest rate at a low 0.5% continues to make the yen an attractive funding currency. This has been a consistent theme throughout 2025, recalling the multi-year weakness we first saw accelerate back in 2023. The widening interest rate differential reinforces the carry trade, making long positions in pairs like AUD/JPY and NZD/JPY look promising for the coming weeks.
Despite some risk-on sentiment, gold holding firm near $3,950 an ounce suggests there is still fear in the market. We’ve seen inflation remain stubbornly above central bank targets in both the US and Europe this year, making gold a key hedge. We should consider using options on gold futures, such as buying puts, to protect our portfolios from any sudden market shocks.
We are seeing a murky outlook for the major currency pairs like EUR/USD and GBP/USD. With the European Central Bank expected to stay on hold and the market still processing the last US Federal Reserve meeting, these pairs could be caught in a range. Trading volatility through options strategies like straddles may be more effective than trying to pick a clear direction.
