United Kingdom retail sales for November fell by 0.1% from the previous month, missing expectations of a 0.4% rise. The EUR/NOK exchange rate dropped after the Norges Bank meeting, while the EUR/USD also decreased as the US Dollar gained strength. Despite lower US inflation data, the USD remained robust, affecting both gold and cryptocurrency markets. Gold remained below $4,350, and Bitcoin, Ethereum, and Ripple experienced drops of nearly 3%, 8%, and 10%, respectively.

Bank Of England’s Interest Rate Decision

The Bank of England cut interest rates to 3.75%, which was a surprising decision that strengthened the pound. The future of these rates remains unclear, with potential further cuts likely in early 2024. In related news, Ethereum’s price is at $2,920, raising concerns about its growing state and effects on decentralization. The Ethereum Foundation has proposed solutions such as state expiry and partial statelessness to tackle these issues. Lastly, a selection of top brokers for 2025 has been identified, covering regions like Mena and Latam, and highlighting options for specific trading needs like low spreads, high leverage, and regulated environments.

UK Retail Sales Impact

The dip in UK retail sales for November is a bearish sign for the British Pound. It suggests that consumer confidence is declining just before the important holiday season. This could hinder long positions in Sterling, particularly against a strong US dollar. The recent rate cut by the Bank of England to 3.75% was split among members, indicating they are hesitant to make further cuts. With the latest data showing UK CPI inflation at 3.1% in November 2025, still above the Bank’s 2% target, they are limited in their options. This conflict between a slowing economy and stubborn inflation suggests there will be continued volatility, making strategies that profit from GBP/USD price swings appealing in the coming weeks. The US Dollar remains strong even though US inflation data has softened, with November CPI at 2.8%. This suggests that the market is focused on the Federal Reserve’s stance, which remains tighter than its G7 counterparts. As long as this perception continues, the dollar is likely to remain the favored currency. This strength in the dollar is suppressing any rallies in EUR/USD, keeping it around the 1.1700 level. While the possibility of a policy divergence between the Fed and the European Central Bank might support the Euro, the dollar’s dominance is the key story for now. We see better opportunities in selling short-term spikes in the pair rather than betting on a sustained breakout. Additionally, the broader risk-off mood is influenced by the Bank of Japan’s recent rate hike, which was widely anticipated and therefore had a muted market reaction. However, this move signals the end of an era of easy global money, likely placing ongoing pressure on risk assets, including cryptocurrencies. We’ve seen similar market trends in past tightening cycles, particularly during the global rate increases of 2022-2023. Disappointing economic reports from one region often led to that currency underperforming for weeks, regardless of central bank comments. The current situation with weak UK retail sales is reminiscent of those times, supporting a cautious to bearish outlook on Sterling as we approach the start of 2026. Create your live VT Markets account and start trading now.

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