Retail sales in the United States dropped from 3.5% to 3.3% year-over-year in November. This suggests a small decline in consumer spending. The EUR/USD exchange rate stayed steady around 1.1650 after the US data release. In contrast, gold prices rose, nearing record highs of $4,640. This increase is driven by expectations of Federal Reserve rate cuts and lower US Treasury yields.

Cryptocurrency Market Trends

Bitcoin stayed above $95,000, with ETF inflows reaching $753 million, showing strong demand. Ethereum also showed positive movement, preparing to exceed its 100-day EMA, due to improving market sentiment. Jerome Powell’s term at the Federal Reserve is coming to an end, with mixed views on monetary policy. Hyperliquid’s value surpassed $26.00, supported by better on-chain metrics and increased derivatives trading. FXStreet offers market information for educational purposes, warning that trading carries risks. The reliability of this data is not guaranteed, so readers should do their own research. This information is not a recommendation for trading. The decline in year-over-year retail sales points to a cooling consumer market, a trend we’ve noticed since the third quarter of 2025. This coincides with last week’s Consumer Price Index data, which showed core inflation dropping to 2.8%, supporting market hopes for lower rates. The slowdown in spending suggests that the Fed’s earlier rate hikes are still affecting the economy.

Market Implications and Trading Strategies

There is a noticeable difference between this data and the Fed’s cautious stance, as some members hesitate to cut rates too soon. The unexpectedly strong jobs report from December, which added 210,000 jobs, gives more conservative members a solid reason to postpone any policy changes. This uncertainty is likely to create volatility leading up to the next FOMC meeting. Traders might consider using options to navigate this indecision, such as buying VIX calls or straddles on major indices. The communication gap from late 2023, just before the Fed’s pivot, was marked by significant market movements. Positioning in interest rate futures for fewer rate cuts than the market currently expects could also be a wise strategy. Gold’s near-record highs are fueled by expectations of rate cuts that may not come swiftly, making it a challenging trade. Utilizing call spreads on gold futures can be a smart way to capture potential gains while managing risk. If the Fed maintains its hawkish stance longer than expected, the resulting dollar strength could cause a pullback. On the other hand, the digital asset market shows stronger momentum, with Bitcoin holding above $95,000. Spot Bitcoin ETFs experienced over $1.2 billion in net inflows in the first two weeks of January, indicating robust institutional interest. For derivatives traders, purchasing call options on Bitcoin or Ethereum allows for capitalizing on this bullish trend while limiting potential losses. Create your live VT Markets account and start trading now.

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