Insights 
VT 
The Italian HCOB manufacturing PMI recorded 49.9 in October, exceeding the anticipated 49.2. This indicates a near-stable situation for the Italian manufacturing sector.
In currency markets, the EUR/USD fell towards 1.1500, the lowest since early August. The GBP/USD dipped to mid-1.3100s, its lowest since mid-April, amidst fiscal concerns in the UK.
Gold And Cryptocurrency Trends
Gold remained steady around $4,000, following negative movement last week, due to the dovish US Federal Reserve comments and rising U.S. Treasury yields. Dogecoin, Shiba Inu, and Pepe are under pressure as large holders reduce their exposure.
The risk appetite faces challenges from upcoming US data and central bank meetings for the Aussie and Pound. Cardano’s ADA price dropped 6% to below $0.58, as traders increase short bets.
FXStreet provides insights but emphasises that investment carries risks, including potential complete capital loss. Caution is advised as it does not guarantee the timeliness or error-free nature of information presented. Independent research is encouraged prior to making investment decisions.
The US Dollar Outlook
The US Dollar is the currency to watch, and we expect it to remain strong in the coming weeks. Hawkish remarks from the Federal Reserve are driving this trend, especially after core inflation reversed its long-term decline and ticked back up toward 3.5% in the last quarter. This renewed inflation concern is making the Fed less likely to ease policy.
This environment puts significant pressure on the Euro, which is now testing the 1.1500 level against the dollar. While the latest Italian manufacturing number was slightly better than expected at 49.9, it’s still below the 50 expansion threshold and doesn’t change the wider picture of a struggling Eurozone economy, which saw a composite PMI of 48.5 last month. With the European Central Bank signaling stability, the policy gap between it and the Fed is widening.
We see a similar story for the British Pound, which is languishing near its lowest levels since April of this year. The market is increasingly pricing in a rate cut from the Bank of England, and renewed fiscal concerns, which remind us of the turmoil back in late 2022, are weighing on sentiment. Traders should consider buying put options on EUR/USD and GBP/USD as a way to profit from further downside.
Gold is holding firm around the $4,000 mark but appears vulnerable to a pullback. The combination of a strong dollar and rising US Treasury yields creates major headwinds for the non-yielding metal. We saw the 10-year Treasury yield push back above the critical 5.0% level last week, increasing the opportunity cost of holding gold.
The broader risk-off mood is visible in the crypto markets, where speculative assets like Dogecoin and Shiba Inu are selling off sharply. We have seen significant capital outflows from these meme coins over the last two weeks, with on-chain data suggesting over $500 million has left these markets. This move away from risk further reinforces the current demand for the US Dollar as a safe haven.
