In December, UK housing prices dropped by 0.4%, missing the expected increase of 0.1%. This indicates an unanticipated decline in the housing market for that month. Currency trends showed the EUR/GBP approaching 0.8700, while the AUD/USD rose above 0.6700, reflecting a growing risk appetite. However, both the EUR/USD and GBP/USD faced minor declines due to manufacturing data and market sentiments.

Gold Prices Surge

Gold prices climbed to nearly $4,400 after a sharp correction, fueled by expectations of a dovish Federal Reserve policy. Cardano started the New Year strong, trading above $0.36 with positive interest. Economic forecasts for 2026-2027 are optimistic about strong performance in advanced economies. The crypto market outlook for 2026 indicates potential volatility driven by regulatory changes and technological advancements. Detailed guides are available to help choose the best brokers in 2026, focusing on needs like forex trading and Islamic accounts. Readers should thoroughly research before making any financial decisions due to the inherent risks involved. The unexpected decline in UK house prices, down 0.4% in December 2025 against expectations of a slight gain, suggests the economic resilience seen last year may be weakening. This news puts unexpected pressure on the Bank of England, which might have to rethink planned rate hikes for the first quarter. As a result, we are considering strategies on the FTSE 100 in anticipation of increased market volatility.

UK Housing Market Impact

Even though the GBP/USD stayed above 1.3450 during light holiday trading, this housing data is a bearish sign for the pound. We believe the market has not yet fully accounted for this weakness, especially after the positive sentiment that closed 2025. Selling GBP/USD futures during any strength appears to be a wise strategy, aiming for a retest of the 1.3400 level we saw last year. The current strength of the US Dollar highlights its relative performance rather than its standalone power. Recent data from the Bureau of Labor Statistics revealed robust wage growth in the US, at 4.1% year-over-year in December 2025. This complicates the Federal Reserve’s expectation for a dovish approach. This economic strength, particularly compared to the disappointing manufacturing figures from the Eurozone, makes the dollar more favorable against the Euro for now. Gold’s rise toward $4,400 is a reaction to broader market uncertainty and expectations of a dovish Fed. This momentum in gold hasn’t been seen since the inflationary pressures of mid-2024, signaling a clear shift towards safety. Buying call options on gold futures (XAU/USD) is a straightforward move to take advantage of this trend in the upcoming weeks. Create your live VT Markets account and start trading now.

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