Germany’s import price index fell from -1.4% to -1.9% year-on-year in November. The US Bureau of Economic Analysis is set to release the Q3 GDP estimate, expecting a growth rate of 3.2%, down from 3.8% last quarter.

Pound Rises Against the US Dollar

The pound is gaining strength against the US dollar due to dovish expectations from the Federal Reserve for 2026. The USD/CHF pair has dropped as the US dollar weakens, while the Swiss National Bank (SNB) keeps its policy steady. The USD/INR is rising, which helps Indian importers with a softer US dollar. Silver prices have gone up, according to FXStreet data, although the XAG/USD slipped below $70.00 after recently hitting highs. XRP is steady, trading above $1.90, with both fund inflows and retail demand increasing. For 2025, key Forex brokers are highlighted, emphasizing low spreads, high leverage, and regulation.

Investment Advice Disclaimer

All information here is for informational purposes only and should not be taken as investment advice. Readers should perform thorough research before making financial decisions. FXStreet and the authors are not responsible for investment results or advice. There are clear signs that the market expects the Federal Reserve to ease its monetary policy by 2026, putting downward pressure on the US dollar. Traders in derivatives should prepare for ongoing dollar weakness as the new year approaches. Recent data from the CME FedWatch Tool shows the market expects over 100 basis points of interest rate cuts in 2026. This aggressive outlook echoes what we saw in late 2023 when traders started anticipating the 2024 easing cycle. Such strong agreement makes short-dollar trades appealing but may become crowded. Germany’s import prices falling to -1.9% indicates increased deflationary pressure in the Eurozone’s largest economy. This may push the European Central Bank towards a more dovish approach, which could limit the euro’s strength against other currencies. This situation creates interest in EUR/USD option spreads aimed at profiting from a range-bound or slightly declining pair. The Pound Sterling is showing solid strength against the dollar, and we expect this trend to continue. Buying call options on GBP/USD could be a good way to benefit from possible increases into early 2026. Likewise, put options on USD/CHF present an opportunity to trade the ongoing decline in that pair as the Swiss National Bank maintains its current policy. Silver’s pause after nearing $70.00 suggests the market is taking a breather. A weaker dollar historically benefits precious metals, as seen during the post-pandemic recovery in 2020. Traders might consider using this consolidation to buy options that could profit from upcoming volatility, as a breakout seems likely in the next few weeks. As the year ends, market liquidity may decrease, leading to larger price fluctuations on lower volume. Using options to limit risk on new positions is a smart strategy during the holiday season. This approach enables participation in significant trends while safeguarding capital from unexpected volatility. Create your live VT Markets account and start trading now.

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