Eurozone construction output fell by 0.8% year-on-year in November, a decrease from the previous 0.5%. This drop reflects changing economic conditions in the Eurozone during this time. Silver prices are near all-time highs due to geopolitical tensions, while gold has climbed above $4,700, driven by similar concerns and trade issues. The EUR/CHF is nearing a four-week low as trade tensions boost the Swiss Franc.

Forex Market Reactions

The EUR/USD has hit a two-week high above 1.1700, influenced by the EU-US dispute over Greenland. GBP/USD has slightly retreated but is still close to 1.3450, with less focus on UK economic data amid global conflicts. Bitcoin has continued its decline, trading below $91,000 as geopolitical tensions rise over Greenland, prompting investors to prefer gold as a safe haven. President Trump has threatened new tariffs, including a 10% rate on goods from several European countries, which could sway investment sentiment. Bitcoin, Ethereum, and Ripple are all seeing losses due to increasing geopolitical uncertainties affecting market perceptions. Additionally, lists of top brokers for 2026 are available, catering to different needs such as low spreads, high leverage, and specific trading platforms.

Impacts of Trade Wars

The market is currently dominated by fears surrounding the trade war over Greenland, making standard economic data less relevant for now. We should focus on the overall weakness of the US dollar and the movement towards traditional safe-haven assets. This “Sell America” sentiment is creating a situation where both the dollar and risky assets are declining together. Gold’s rise above $4,700 per ounce indicates strong market signals, and we expect this trend to continue. We plan to increase our long positions through call options on XAU/USD to benefit from potential gains as geopolitical risks lead up to the February 1 tariff deadline. This scenario reminds us of the 2019 US-China trade dispute, which drove gold prices up as uncertainty peaked. Given the ongoing selling pressure on the dollar, we should maintain a bearish view on the currency. The US trade deficit, which has consistently widened through 2025, creates a weak fundamental environment for the dollar. Shorting dollar futures or buying put options on dollar-tracking ETFs are effective strategies to navigate this trend. The Euro is strengthening against the dollar, pushing EUR/USD above 1.1700. While going long may seem appealing, we must tread carefully as Europe is a direct target of the proposed tariffs. The recent report showing a 0.8% drop in Eurozone construction output suggests underlying weaknesses that could keep this rally precarious. Sterling presents a mixed outlook, caught between dollar weakness and the UK facing tariffs. Speculation regarding Bank of England rate cuts, which gained traction late last year, is also weighing on the pound. For GBP/USD, using option strategies that anticipate increased volatility, like a straddle, may prove wiser than straightforward directional trades. Bitcoin’s sharp drop below $91,000 shows that it is being viewed as a high-risk asset rather than a safe haven. Investors are seeking gold instead, following the familiar pattern observed during the risk-off events in March 2020. We anticipate further declines for cryptocurrencies as long as geopolitical tensions remain elevated, making put options or short futures viable strategies. Create your live VT Markets account and start trading now.

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