Insights 
VT 
China’s Gross Domestic Product grew by 1.1% in the third quarter, surpassing the expected 0.8%. The economic performance in China provided a positive influence on the Australian Dollar, which maintained its gains.
The USD/CAD pair edged lower, nearing 1.4000, despite weaker oil prices. Similarly, the Japanese Yen recovered some lost ground against a weaker USD but showed limited potential for further upward movement.
Gold Prices Drop Post Holiday
Gold prices have decreased to around $4,245 during the post-festive period as demand waned after a previous peak. In India and Pakistan, gold has risen according to FXStreet data.
In the cryptocurrency market, Mantle, Zcash, and Bittensor have recorded gains, recovering from a previous decline. Conversely, BNB, Solana, and Cardano have suffered double-digit losses amid a surge in market liquidations exceeding $1 billion.
The EUR/USD pair remains subdued near 1.1650 after S&P Global Ratings downgraded France’s credit rating due to budget uncertainties. Meanwhile, the GBP/USD remains steady above 1.3400, balancing the effects of a softer USD and dovish BoE expectations.
Impact of China’s Economic Growth
We have to react to China’s economy growing 1.1% in the third quarter, which was stronger than the 0.8% we were expecting. This suggests continued demand for commodities, likely keeping the Australian Dollar supported for now. In fact, Australian iron ore exports to China for September 2025 were up 4% from the previous month, confirming this trend.
The Euro is facing headwinds, as seen by the S&P downgrade of France’s credit rating to A+. This points to underlying fiscal weakness in a core Eurozone economy, making it difficult to be bullish on the EUR/USD pair. This move follows last week’s German factory orders, which posted a surprising contraction of 0.5%, signaling broader regional sluggishness.
Gold is taking a breather below $4,250 after its recent record-setting run, which we saw accelerate after the Federal Reserve’s last rate cut in August 2025. With China’s strong data, some capital is likely rotating out of safe havens and into riskier assets for the short term. The pullback offers a moment to reassess positioning before the next major catalyst.
Looking ahead, the upcoming meeting between Trump and Xi is creating major uncertainty, especially with the focus on strategic resources. We are seeing a significant bid in volatility, with the Cboe Volatility Index (VIX) climbing back above 18 last week for the first time in two months. This suggests traders are buying protection, like puts on broad market indices, ahead of the summit.
Meanwhile, the British Pound is stuck in a range against a softer US Dollar, as dovish expectations for the Bank of England are capping any significant rally. Last week’s UK inflation data came in at 2.2%, just above the bank’s target, giving policymakers little reason to turn hawkish. This stalemate makes options strategies that profit from low volatility, such as short straddles, look attractive on GBP/USD.
The crypto market is showing signs of stress after more than $1 billion in liquidations over 24 hours caused steep drops in tokens like Solana and Cardano. This kind of deleveraging event tends to flush out weak hands and can signal a short-term bottom, but it also highlights extreme volatility. We’ve seen open interest on major crypto derivatives exchanges fall by nearly 15% since Friday, a clear sign of traders closing positions.
