Insights 
VT 
The New Zealand GDT Price Index decreased by 2.4%, following the previous drop of 1.4%. In related economic updates, New Zealand’s unemployment rate rose to 5.3% for the third quarter, meeting expectations.
The Dow Jones Industrial Average faces challenges from AI trade concerns, while the focus is on the US ISM Services PMI amidst a nearing US shutdown. In currency markets, EUR/USD has declined for five consecutive days, mainly influenced by a robust US Dollar.
Currency Markets Overview
GBP/USD reached its lowest point since April, driven by the UK’s increased borrowing costs and the strong performance of the US Dollar. Gold prices fell to three-day lows around $3,930 per troy ounce, pressured by the strengthening US Dollar and reduced expectations for a December Fed rate cut.
Ethereum’s price dipped below $3,500, driven by ETF outflows and overall negative sentiment in the crypto market. DeFi platforms are under scrutiny after a $120 million hack on the Balancer exchange, which reported being unable to halt the incident due to its impact on older pools.
Going forward, attention is on the Fed’s decisions, the potential impact of the US Supreme Court, and central bank meetings in Australia and the UK, as market risk sentiment remains sensitive.
Given the strength in the US Dollar, we see continued pressure on major currency pairs. The Dollar Index (DXY) is pushing multi-month highs, recently trading above 107.50 as markets price out a December Fed rate cut. We anticipate that traders will favor buying USD call options or selling EUR/USD futures as the pair struggles below the key 1.1500 level.
Outlook On Major Currencies
The British Pound’s slide towards 1.3020 is a clear bearish signal, compounded by domestic concerns over borrowing costs. With the latest UK inflation data from October 2025 showing a stubborn 3.9%, the Bank of England’s hands are tied, creating a negative outlook. This environment makes put options on GBP/USD an attractive strategy to hedge against further declines.
Conversely, the Japanese Yen is showing unusual strength due to its safe-haven status and a hawkish Bank of Japan. Looking back at similar periods of BOJ hawkishness in 2023, the Yen saw rapid appreciation against both the Euro and the Dollar. We believe that long Yen positions, possibly through futures or options, offer a good hedge against the broader risk-off sentiment.
In New Zealand, the situation appears weak, with the GDT price index falling further to -2.4% and unemployment holding at a high of 5.3%. This confirms a slowing economy, suggesting the New Zealand Dollar will likely underperform. Derivative traders should consider strategies that benefit from NZD weakness, such as shorting NZD/USD futures.
Volatility in US equity markets seems likely, especially with fears of an “overloaded AI trade” and a potential government shutdown. The VIX, a measure of market fear, has recently climbed to over 20, a level not consistently seen since the banking turmoil of 2023. This suggests that buying straddles or strangles on major indices like the Nasdaq 100 could be profitable in the coming weeks.
The cryptocurrency market is facing its own headwinds, with Ethereum’s drop below $3,500 driven by significant ETF outflows totaling over $450 million last week alone. The recent $120 million Balancer hack has further damaged confidence in the DeFi space. We see this as a time for caution, with traders likely looking at shorting ETH futures or buying puts as downside protection.
