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Japan’s unemployment rate in September was 2.6%, surpassing forecasts of 2.5%. This came amid a range of economic events affecting various markets worldwide.
The US-China trade situation saw President Trump and President Xi maintain a framework deal. The meeting resulted in China reducing Fentanyl tariffs and the US resuming soybean exports.
Currency Market Movements
In currency markets, the EUR/USD traded slightly above its recent lows at the end of a losing streak. GBP/USD continued to decline, reaching six-month lows.
The cryptocurrency market experienced a dip, with Bitcoin trading below $109,000. Both Ethereum and Ripple also saw declines, correcting by 8% and 7%, respectively.
Gold aimed for recovery, seeking its 21-day SMA despite settling above $4,000. The US Dollar held firm, supported by decreased bets on a December rate cut.
Zcash maintained a bullish run, trading robustly at around $360. Despite market volatility, it managed to edge higher, driven by its privacy features.
Trading Tips and Insights
Various resources, including ‘Best Brokers 2025’ guides, provide information for currency and commodity trading. Tips for traders include choosing brokers based on factors like low spreads, leverage, and specific trading platforms.
The latest unemployment figure from Japan, coming in slightly higher than expected at 2.6%, signals potential softness in the labor market. This data point could give the Bank of Japan reason to pause on any further policy tightening in the coming months. For traders, this reinforces a bearish outlook on the Japanese Yen, as monetary policy divergence with the US will likely continue.
We are seeing this play out against a backdrop of a persistently strong US Dollar, fueled by a hawkish Federal Reserve. With recent data showing US core inflation for Q3 2025 holding stubbornly around 3.5%, the market is pricing out any chance of a Fed rate cut before mid-2026. This makes long US Dollar positions, especially against the Yen, a primary focus for derivative strategies like futures and options.
This widening interest rate differential is the core of the trade, a theme that has dominated markets for over a year. We remember when the Bank of Japan finally ended its negative interest rate policy back in early 2024, but that move has been dwarfed by the Fed holding rates higher for longer. The current environment suggests that selling JPY/USD call options or buying puts could be an effective way to position for further Yen weakness.
This dollar strength is also weighing on commodities, as seen with gold and oil prices. The hawkish Fed stance makes holding non-yielding assets like gold less attractive, while a strong dollar makes oil more expensive for foreign buyers. Consequently, we should consider strategies that benefit from sideways or downward pressure on key commodities.
Other major currencies are feeling the pressure as well, with the Australian Dollar and British Pound showing significant weakness. The global move into the US Dollar for its relative safety and yield continues to hurt these currencies. This trend supports maintaining short positions in pairs like AUD/USD and GBP/USD through the remainder of the year.
