Belgium’s Consumer Price Index fell to 2.06% in December from 2.4% the month before. This shows a downward trend in consumer price inflation. In the US, Durable Goods Orders dropped by 2.2% in October, more than the expected decline of 1.5%. Meanwhile, the average for ADP Employment Change increased to 11.5K by December 6.

Currency and Market Movements

The EUR/CHF exchange rate declined to near one-month lows as geopolitical issues supported the Swiss Franc. At the same time, gold prices approached $4,500 due to rising tensions and a weaker US Dollar. The EUR/JPY pair decreased as the Japanese Yen strengthened following comments about market intervention. The Pound Sterling held strong against the US Dollar before the release of flash US Q3 GDP data, staying above 1.3500. In the cryptocurrency market, Bitcoin traded over $87,000 despite a risk-off attitude among investors. Ripple remained steady above a $1.90 support level thanks to consistent fund inflows and retail demand. The US economy showed strong growth with a 4.3% GDP rise in Q3, surpassing the 3.3% prediction. This caused gold prices to fall from recent highs while pressures on the US Dollar continued.

Economic Trends and Predictions

With mixed economic signals, it’s wise to be cautious in the upcoming weeks. The strong US Q3 GDP reflects past performance, while recent data, like weak durable goods orders in October and soft employment figures in December, indicate a slowdown. This contrast creates uncertainty around the Federal Reserve’s policies in early 2026, making trading decisions more challenging. Belgium’s inflation drop to 2.06% aligns with the wider disinflation trend in the Eurozone, where November’s headline inflation was 2.3%. This situation allows the European Central Bank to maintain steady rates and could lead to different policies compared to the US. We might consider using options to prepare for possible EUR weakness if the Federal Reserve remains hawkish longer than anticipated. Geopolitical risks are driving investors toward safe assets like the Swiss Franc and gold, nearing $4,500. This risk-off sentiment is also seen in the crypto market, with Bitcoin falling below $88,000 after not maintaining recent highs. We recommend buying volatility through derivatives on major stock indices as a smart way to protect against unexpected shocks during the low-liquidity holiday period. In currency markets, the Pound’s strength above 1.3500 seems excessive, especially after the Bank of England cut rates in November 2025. Additionally, comments from the Japanese government regarding intervention make shorting the Yen risky. In this environment, strategies that define risk, like buying put options on GBP/USD, could safeguard against a sudden market reversal. Looking towards 2026, the market anticipates a potential shift where old relationships may not hold. The current situation feels similar to late 2023 when economic data was mixed before a clear trend established itself. Therefore, we should decrease exposure to crowded trades and get ready for a revaluation of risk across different asset classes in the new year. Create your live VT Markets account and start trading now.

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