**Major Cryptocurrencies Facing Correction** In financial markets, Aave’s price has dipped below $186 as the downward trend continues. Investors are keeping an eye on global financial issues, especially central bank policies and geopolitical matters like the Ukraine-Russia conflict. Additionally, brokers for trading and financial services in 2025 are being reviewed across different regions and conditions. FXStreet advises investors to research thoroughly before putting money in. They do not provide specific investment advice, and investors take on their own risks. The opinions expressed do not represent FXStreet’s official view. **Central Bank Policies and Currency Differences** As of December 17, 2025, a key focus is the increasing gap in central bank policies. We see signs that inflation is dropping faster than expected in Europe, raising expectations for rate cuts by the European Central Bank and the Bank of England. This sets a clear contrast with the United States, where the dollar is gaining strength. In Europe, options traders might want to look into strategies that benefit from a weaker Pound Sterling and Euro. Recent UK inflation figures are at 3.2%, which is below the expected 3.5%. This trend is pushing the GBP/USD towards 1.3300. Similarly, Austrian inflation has decreased to 4%, reinforcing the idea that the ECB will need to ease its policies, affecting the EUR/USD. This push for European rate cuts has been a developing trend since late 2023. In November 2023, Eurozone inflation fell to a two-year low of 2.4%, indicating rapid cooling. Current market activities suggest that traders should be ready for further easing into early 2026. The US Dollar presents a more complicated picture, offering chances for volatility trades like straddles or strangles before Thursday’s CPI data. Although the dollar is currently bouncing back due to short-covering, the expectation is that a weakening labor market will drive the Federal Reserve to cut rates eventually. This mix of short-term strength and long-term weakness creates a favorable environment for derivatives. Recent US non-farm payrolls data has consistently stayed below the 200,000 mark, mirroring the slowdown that began in the fourth quarter of 2023. This supports the possibility of the Fed easing rates in the future, but presently, the dollar’s yield advantage remains appealing. Traders using futures should monitor US bond yields closely, as these will indicate the market’s beliefs about future Fed actions. The policy difference is most noticeable with Japan, where the Bank of Japan is likely to maintain a dovish stance. The rise in USD/JPY towards 155.50 makes long positions on this pair attractive, given that the interest rate difference favors the dollar. This carry trade could grow if the Fed indicates it will keep rates steady for longer than other global entities. Gold’s performance is telling, holding steady above $4,300 an ounce despite the strong dollar. This suggests an underlying caution in the market, likely due to geopolitical risks and the expectation of global rate cuts devaluing fiat currencies. Traders might consider using call options on gold as protection against unexpected market disruptions. Lastly, we are witnessing a clear shift away from more speculative assets into traditional safe havens. The correction in major cryptocurrencies like Bitcoin and Ethereum sharply contrasts with gold’s stability. This indicates a risk-averse sentiment that may continue until the year ends. Create your live VT Markets account and start trading now.

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