### Currency Market Overview Currently, in the currency market: – **EUR/USD** is around **1.1740** – **GBP/USD** is near **1.3480** – **USD/JPY** sits at **156.50** – **AUD/USD** has seen a small gain, trading close to **0.6690** Central banks are focused on keeping prices stable. They use interest rates to manage inflation and adjust them based on economic data, which can either loosen or tighten monetary policy. Important economic reports coming up include the **US ISM Manufacturing PMI**, **Germany’s HICP**, and **Australia’s CPI**. Additional releases will feature the **US ADP Employment Change**, **ISM Services PMI**, **Eurozone HICP**, **US Trade Balance**, and **Consumer Credit**. Next week, we will see the **US Nonfarm Payrolls** report and the estimate for the **Michigan Consumer Sentiment Index**. These will likely affect market feelings and central bank strategies. ### The Calm Before the Storm As the new year starts, market activity is low, creating a still atmosphere for derivatives trading. All eyes are on next week’s US employment and inflation data, which will be the first real test of expectations for Federal Reserve rate cuts in 2026. In November 2025, the **Nonfarm Payrolls** report revealed a surprising gain of **199,000** jobs, with the unemployment rate dropping to **3.7%**. This strong labor market raised questions about how quickly the Fed could reduce policy restrictions. The upcoming December NFP report on January 9 will be crucial for confirming this trend. The **US Dollar Index** is steady around **98.40**, but this calm may not last long. A disappointing jobs report could cause the DXY to fall, supporting market bets for a weaker dollar and making options for this scenario appealing. Conversely, a strong report might push the dollar up sharply, forcing out short-dollar positions. Gold is trading near **$4,320**, boosted by the belief that the next Fed move will be a rate cut. However, this also means gold is at risk if next week’s economic data is unexpectedly strong. Traders might consider options to protect their long gold investments against a sudden drop if the NFP report is robust. Recently, equity markets saw a strong rally in the last quarter of 2025, driven by the Fed’s dovish shift in December. This current low volatility may be just the calm before a storm. Derivative traders should be alert for a rise in the **VIX** if next week’s data disrupts the view of a smooth economic slowdown. Create your live VT Markets account and start trading now.

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