India’s federal fiscal deficit rose from INR 8,251.44 billion to INR 9,766.71 billion in November. This increase signals growing fiscal challenges for the country as the year comes to a close. In financial markets, the EUR/USD pair gained some momentum around the 1.1750 area as 2025 ended. At the same time, GBP/USD experienced slight pressure, hovering near 1.3450 while adjustments were made for the year’s end.

Gold And Cryptocurrency Market

Gold, trading at about $4,300, seems ready for monthly gains despite recent dips. The cryptocurrency market remained stable, with Bitcoin, Ethereum, and Ripple likely set for a rebound in the New Year. Economic forecasts for advanced countries in 2026 look promising. Following global economic strength in 2025, it is expected that positive factors will continue. In 2025, the crypto market went through ups and downs due to regulatory changes and the emergence of Digital Asset Treasuries. Leading brokers offered various trading options, including low spreads and high leverage, to suit different trading preferences. With India’s fiscal deficit now over ₹9.7 trillion, signs of fiscal strain are evident. This figure is a notable increase, representing over 35% of the annual target, suggesting that more government borrowing may be necessary. This strain could pressure the rupee as we enter the new year, so it would be wise to consider strategies that profit from a weaker INR in the first quarter of 2026.

US Dollar And Economic Optimism

The US dollar’s slight recovery seems more like year-end positioning than a real trend change. The Dollar Index remains below 98.30, a large drop from the 104-105 levels seen in early 2023, indicating that the weak-dollar environment is still ongoing. We can use this pause to build positions in anticipation of the trend continuing, perhaps through call options on EUR/USD. Gold at $4,300 shows the strength of a long-term bull market, likely driven by central bank demand and inflation concerns from the early 2020s. However, after five months of gains, the metal appears overextended and at risk of profit-taking. It may be wise to protect long positions by buying some out-of-the-money puts for February or selling short-term covered calls to earn income. Overall, the optimistic economic outlook for 2026 suggests that risk assets are likely to perform well. Current low trading volumes have reduced implied volatility across many markets, making options cheaper. This creates a good chance to set up long-volatility positions, like straddles on major equity indices, before market activity picks up in January. Create your live VT Markets account and start trading now.

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