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Dollar Steadies After Shutdown Progress; Pound Drops on Weak Jobs Data
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Dollar Steadies After Shutdown Progress; Pound Drops on Weak Jobs Data

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The U.S. dollar traded slightly higher on Tuesday, supported by optimism that Washington is nearing an agreement to end the country’s longest-ever government shutdown. Meanwhile, the British pound fell after data showed a slowdown in U.K. wage growth, reinforcing expectations for a Bank of England rate cut next month. At 04:10 ET (09:10 GMT), the U.S. Dollar Index (DXY) edged up 0.1% to 99.58, reflecting a modest rebound amid improved market sentiment. Dollar Holds Firm as Shutdown Resolution Nears The greenback firmed after the U.S. Senate late Tuesday passed a bill to restore government funding, signaling the potential conclusion of the prolonged federal shutdown. The legislation now moves to the House of Representatives, where Speaker Mike Johnson indicated he aims to secure swift approval and forward the measure to President Donald Trump for signing into law. “The reopening of the government has sparked a classic risk-on tone in the FX market,” analysts at ING noted. “High-beta currencies like the Australian and New Zealand dollars are leading gains alongside equities, while the yen remains under pressure.” So far, the dollar’s overall response has been muted — a pattern consistent with its reaction when the shutdown first began in October.An official resolution would also pave the way for the release of delayed U.S. economic data, offering traders fresh insights into the health of the world’s largest economy. Recent figures already hint at slowing momentum: the University of Michigan’s consumer sentiment index fell to its weakest level in nearly 3½ years in early November, strengthening the case for another Federal Reserve rate cut in December. Sterling Falls as Labor Market Weakens In Europe, GBP/USD slipped 0.4% to 1.3124 after U.K. labor data showed cooling wage growth and rising unemployment. The unemployment rate climbed to 5.0% in the third quarter, up from 4.8%, marking the highest reading since early 2021. Average earnings excluding bonuses slowed to 4.6% year-on-year in the three months to September. “These aren’t extremely dovish numbers, but they do reinforce the gradual softening in rate expectations,” ING said. “With both inflation and employment trending lower — and with the Autumn Budget introducing new tax pressures — the case for a December BoE rate cut is gaining traction.” The EUR/USD pair remained steady at 1.1556, with traders awaiting the latest ZEW economic sentiment survey from Germany. ING analysts expect the pair to hold near 1.150–1.160, citing limited volatility in the near term. Yen Weakens to Nine-Month Low In Asia, the USD/JPY pair traded 0.1% higher at 154.30, with the yen hovering near a nine-month low as investors embraced riskier assets amid optimism over the U.S. fiscal outlook. The Japanese currency also softened after new Prime Minister Sanae Takaichi signaled that policymakers should take a cautious approach toward future rate hikes. Elsewhere, USD/CNY edged up to 7.1207, as the yuan continued to face pressure from persistent worries about China’s slowing growth. October’s modest inflation uptick did little to lift sentiment. Meanwhile, AUD/USD fell 0.2% to 0.6524, retracing part of its earlier rally that followed the U.S. Senate’s breakthrough funding vote on Sunday.

Gold Recovers After 8% Drop; Bullish Signs Build
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Gold Recovers After 8% Drop; Bullish Signs Build

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Gold (XAU/USD): Buyers Return After Sharp 8% Correction Gold (XAU/USD) has witnessed heightened volatility in recent sessions, swinging sharply in both directions. After falling 1.7% on Friday, 17 October 2025, the metal rebounded 2.4% on Monday, 20 October 2025, setting a new record high at US$4,381. That momentum quickly faded as Tuesday, 21 October 2025, brought a steep 6.3% intraday plunge. Gold later recovered some ground to end the session at US$4,125, still down 5.3%, marking its worst daily drop since August 2020. Short-Term Weakness, Long-Term Trend Intact The sell-off was likely driven by stop-loss triggers on leveraged long positions, following the strong rally that began after the 29 August 2025 breakout from a four-month Ascending Triangle pattern. This pullback appears to be a phase of profit-taking rather than a trend reversal. Overall, both technical indicators and macroeconomic drivers continue to favor Gold’s broader bullish outlook over the medium to long term. Technical Highlights These signals together suggest that a short-term bullish reversal may already be in motion, though volatility remains a key factor in the near term.

Pound Drops as UK Inflation Stays at 3.8%; Gold, Silver Slide
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Pound Drops as UK Inflation Stays at 3.8%; Gold, Silver Slide

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Forex Today: Pound Slips as UK Inflation Holds Steady, Metals Plunge The British Pound weakened in early London trading after inflation data from the UK came in cooler than expected, tempering rate hike expectations. The UK CPI report showed annual inflation holding at 3.8%, unchanged from the previous reading and below the forecasted 4%, which would have marked a 21-month high. The data triggered an immediate drop in GBP/USD, slipping about 30 pips following the release. Gold and Silver Face Sharp Selloff Precious metals endured a brutal session, with Gold tumbling over 6% in its largest one-day fall in more than six years. Silver also declined sharply amid extreme volatility that likely forced many long positions to unwind. Both metals have since stabilized slightly, though Gold appears to be recovering faster than Silver. Analysts suggest the long-term bullish trend in Gold and Silver may have peaked, while Platinum has found firmer footing. U.S. Stocks Push Higher on Earnings Strength Wall Street continues to power higher, led by the NASDAQ 100, now closing in on record highs, and the S&P 500, which is also near peak levels. Around 85% of S&P 500 companies reporting so far have beaten expectations, fueling optimism over corporate earnings. Adding to market confidence, President Donald Trump reiterated hopes for a U.S.–China trade agreement, though he warned that tariffs of 155% on Chinese imports could be imposed starting November 1 if talks break down. Currency and Commodity Highlights The New Zealand Dollar (NZD) outperformed major peers during Asian trading, while the Japanese Yen (JPY) lagged. USD/JPY remains bullish above ¥151.64, a level watched by trend traders as key support. Meanwhile, WTI Crude Oil advanced after Trump hinted at a potential U.S.–India trade deal, which could shift Indian crude imports away from Russia toward the United States. Asia-Pacific and Canada Updates Japan’s new Prime Minister announced plans to maintain a minority government and introduce a large stimulus package aimed at easing inflationary pressures — a move considered bearish for the Yen, though the reaction has been muted. In Canada, inflation data surprised to the upside, with a 0.1% monthly rise versus expectations for a 0.1% decline, giving the Canadian Dollar (CAD) a temporary boost.

Gold Pulls Back from Record Highs as Trade Optimism Grows
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Gold Pulls Back from Record Highs as Trade Optimism Grows

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Gold Retreats from Record Highs as Trade Hopes Boost Risk Appetite Gold prices slid on Tuesday, easing from record levels as renewed optimism over U.S.–China trade relations prompted investors to shift away from safe-haven assets. At 09:20 ET (13:20 GMT), spot gold dropped 3.4% to $4,201.65 per ounce after touching an all-time high of $4,381.21 on Monday. U.S. gold futures for December delivery also dipped 0.5% to $4,217.25, as traders booked profits following last week’s sharp rally. Trade Optimism Sparks Market RotationThe decline came after U.S. President Donald Trump expressed confidence about reaching a “strong and fair” trade deal with Chinese President Xi Jinping during next week’s summit in South Korea. In addition, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in Malaysia later this week, signaling progress in easing trade tensions. Comments from White House adviser Kevin Hassett about a potential end to the U.S. government shutdown further lifted sentiment, reducing demand for defensive assets like gold. Analysts Caution on Overheated MarketJohn Higgins, Chief Markets Economist at Capital Economics, cautioned that gold’s price surge may be overextended, noting it now trades about 60% above its inflation-adjusted 1980 peak and nearly triple its long-term average. Higgins warned of a possible correction if investor sentiment continues improving. Metals Weaken as Dollar StrengthensOther precious metals mirrored gold’s retreat. Silver dropped 4.8% to $48.95 per ounce, platinum fell 5.3% to $1,565.10, and copper on the LME slipped 0.6% to $10,624 per ton. A stronger U.S. dollar added pressure, making metals more expensive for global buyers. The broad pullback underscores a shift in market sentiment as geopolitical and trade risks appear to subside.

Canadian Inflation Rises, Rate Cut Bets Fade
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Canadian Inflation Rises, Rate Cut Bets Fade

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Canadian Inflation Jumps in September, Rate Cut Hopes Fade Canada’s inflation accelerated in September, rising above the Bank of Canada’s (BoC) 2% target for the first time in six months and reducing expectations for another rate cut later this month. Headline CPI increased 2.6% year-on-year, beating the market forecast of 2.3%, while monthly inflation rose 0.1%, rebounding from a 0.1% decline in August. The surge was mainly driven by higher transportation and food prices. The average of the BoC’s two core inflation measures, which exclude food and energy, eased slightly to 3.15% from 3.25% in August but remained above expectations of 3.0%, signaling that price pressures persist across key sectors of the economy. BoC Faces Tough Decision Ahead of October Meeting The hotter CPI data adds pressure ahead of the Bank of Canada’s October 29 policy meeting. Markets had widely priced in another 25-basis-point rate cut after the September reduction to 2.50%, but following the inflation surprise, rate cut odds dropped to 77% from 87%. While weak growth and rising unemployment — now at 7.1% — continue to support a looser stance, the BoC may pause further easing until it sees clearer signs that inflation is stabilizing. Canada’s economy contracted 1.6% in Q2, as exports to the U.S. fell amid ongoing tariff concerns. Loonie Stable, Stocks Slide The Canadian dollar (USD/CAD) traded steady at 1.4027, down 0.10% on the day, showing limited reaction to the CPI data. The loonie remains under pressure, marking four consecutive weekly losses against the U.S. dollar, down 2.1% over that period. Meanwhile, the S&P/TSX Composite Index fell 474 points (1.5%) to 29,942, reversing earlier gains as investors reassessed the outlook for monetary policy and inflation.

Gold Forecast: XAU/USD Steady Above $4,200 as Bulls Defend the Trend
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Gold Forecast: XAU/USD Steady Above $4,200 as Bulls Defend the Trend

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Gold Forecast: XAU/USD Consolidates Above $4,200 After Record Rally Gold’s historic surge took a breather late last week as the yellow metal briefly corrected from new all-time highs near $4,380, dropping almost $200 before finding firm support around $4,200. The pullback was sharp but orderly, suggesting a healthy consolidation rather than a full-blown reversal. After weeks of relentless gains and record closes, a period of profit-taking was inevitable. Despite Friday’s heavy candle hinting at a potential short-term top, the broader bullish structure remains intact. Gold’s uptrend continues to be underpinned by strong fundamentals, leaving little reason to assume the rally has run its course. Upcoming Events in Focus This week’s calendar carries several potential catalysts for renewed volatility. The delayed U.S. CPI report, now expected on Friday (October 24), will be closely watched. Markets anticipate headline inflation to rise 0.4% and core CPI by 0.3%. A softer print could fuel bets on further Federal Reserve rate cuts, likely supporting gold prices, while a stronger figure may revive the U.S. dollar and cap short-term upside. The ongoing U.S. government shutdown continues to stall other key data releases, keeping the spotlight on inflation and central bank policy expectations. Elsewhere, U.K. CPI data on Wednesday and global PMI releases on Friday could influence sentiment across major currency pairs and commodities. Why Gold Still Has Momentum Gold’s impressive rally has been powered by several aligned forces: These underlying supports show no sign of fading, suggesting that recent weakness is a temporary pause in a broader bullish trend. Eyeing $5,000: Still a Possibility? While the $5,000 mark may sound ambitious, it’s no longer unrealistic given the scale of the ongoing move. Every dip this year has been met with aggressive buying, indicating sustained confidence among long-term investors. A deeper correction toward $4,000 would not undermine the uptrend—it would likely attract renewed buying interest. For now, there’s little evidence of panic or long-term profit-taking, and momentum remains on the bulls’ side. Traders should remain cautious about shorting against this strength. Gold has repeatedly punished bearish bets, and unless clear downside follow-through emerges, the dominant bias remains upward. Technical Picture On the charts, XAU/USD maintains a strong bullish structure, defined by higher highs and higher lows. All key moving averages continue to point upward, confirming a well-established trend. However, overbought momentum readings hint that a short-term cooling phase or sideways action could develop before the next breakout. Immediate support levels: $4,200, $4,180, $4,059, $4,023, and $4,000Resistance zones: $4,380, $4,400, and $4,500 As long as gold stays above $4,000 and maintains its higher-low structure, the path of least resistance remains to the upside, keeping the bullish gold outlook intact.

Forex Today: Dollar Flat as China GDP Matches Forecast
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Forex Today: Dollar Flat as China GDP Matches Forecast

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Forex Today: Dollar Steady, China Data Confirms Moderate Growth Currency markets kicked off the week on a calm note Monday as traders digested China’s latest economic data and awaited fresh cues from global policymakers. With no major economic releases scheduled in Europe or the U.S., sentiment was guided by Asian data and improving risk appetite. China Growth Slows Slightly, Meets Forecasts China’s third-quarter GDP expanded by 4.8% year-on-year, aligning with market expectations but easing from the 5.2% growth seen in the previous quarter. Retail Sales in September rose 3%, while Industrial Production climbed 6.5%.The People’s Bank of China (PBoC) maintained its benchmark one-year and five-year Loan Prime Rates at 3.00% and 3.50%, respectively, as widely anticipated. US Dollar Struggles for Direction After ending last week higher, the U.S. Dollar Index (DXY) traded flat near 98.50 early Monday, reflecting a cautious tone in markets. U.S. stock futures gained between 0.35% and 0.55%, signaling a modest improvement in risk sentiment.Over the weekend, U.S. President Donald Trump expressed optimism that China would resume soybean purchases at previous volumes, saying he expects progress in trade negotiations. US Dollar Performance Snapshot The U.S. Dollar remained the strongest against the Japanese Yen, while commodity-linked currencies like the New Zealand Dollar saw mild gains. USD EUR GBP JPY CAD AUD NZD CHF -0.11% 0.04% 0.11% 0.02% -0.08% -0.14% -0.06% (Percent change of each currency pair based on USD as the base currency.) Gold Pauses Near Record Levels Gold (XAU/USD) remains steady around $4,250 after a brief correction from last week’s new all-time high of $4,380. Despite Friday’s drop of over 1.5%, the metal gained nearly 6% for the week, underlining ongoing investor interest in safe-haven assets. Key Pair Updates

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