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    Germany’s Harmonised Index of Consumer Prices shows a 0.2% monthly increase, falling short of expectations

    by VT Markets
    /
    Jan 6, 2026
    # Bitcoin and Cardano Insights This information is for educational purposes only. Always do your research before making investment choices. The content is a general guide, not specific advice, and highlights the risks in financial markets. Germany’s lower-than-expected inflation is a key signal. It confirms a downward trend we observed in the second half of 2025. Eurozone inflation decreased from over 4% to just above 2.5%. This situation pressures the European Central Bank (ECB) to think about cutting interest rates sooner than the US Federal Reserve. This difference in policy is affecting the EUR/USD exchange rate, which is dropping below the important support level of 1.1700. It might be a good idea to buy put options on the Euro since the trend appears to be downward. The market is quickly adjusting to a higher chance of an ECB rate cut in the second quarter, a view that has changed in just a few weeks. # US Dollar Strength The strength of the US Dollar is a major theme, causing the GBP/USD to decline from its recent highs. Even with some weaker US manufacturing data last week, the market is focused on the fact that US core inflation is still high, ending 2025 at 3.2%. This situation allows the Federal Reserve to keep interest rates higher for a longer time, making long positions in US Dollar Index futures attractive. Gold is showing resilience above $4,450 despite the strong dollar. This suggests that traders expect rate cuts globally soon. Increased geopolitical tensions, like recent events in Venezuela, are adding more support for gold. We could use call options to keep benefiting from rising gold prices while managing our risk. Copper prices are rising, mainly due to supply issues from strikes and concerns over new tariffs, rather than changes in monetary policy. Traders who have invested in copper futures should think about protecting their profits. Strategies such as using a trailing stop-loss or selling out-of-the-money call options against a long position could be wise. Create your live VT Markets account and start trading now.

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