The Bank of Japan (BOJ) kept its interest rate at 0.75%, in line with expectations. As a result, the Japanese Yen fell to a one-week low against the US Dollar due to worries about fiscal stability. Gold prices are on the rise, approaching a record high of $5,000, as people expect the Federal Reserve to ease its policies further. Meanwhile, the Pound Sterling is holding steady after increasing by 0.5%, with UK Retail Sales rising by 0.4% month-over-month in December.

Currency Movements

The Euro is stable around 1.1750, awaiting preliminary PMI data from Germany, the Eurozone, and the US. On the other hand, the Australian Dollar has reached a 15-month high, bolstered by strong PMI figures. In the crypto market, Bitcoin is showing signs of recovery, but Ethereum and Ripple continue to struggle. Tron (TRX) has maintained its gains, surpassing $0.30 after a positive price breakout. Following the threat of NATO tariff increases, relations with the US are easing as President Trump changed his position on Greenland. The article discusses selecting brokers in 2026, covering Forex to CFD trading and offering comprehensive guides for various regions. The market suggests that more easing from the Federal Reserve is likely. Recent data supports this, with the US Core PCE, the Fed’s preferred inflation measure, cooling to 2.2% in the last quarter of 2025 and job growth slowing. This expectation is currently driving asset prices, with a weak US dollar becoming the main focus for the upcoming weeks.

Strategies for Investors

Gold is responding strongly to these conditions, nearing the crucial $5,000 mark. Unlike previous surges driven by geopolitical concerns, this rise is purely based on expectations around monetary policy, indicating it has solid support. Investors might consider using call options to benefit from further price increases or take advantage of small dips to add to long futures positions. The Australian Dollar is showing impressive strength, reaching a 15-month high supported by strong local data. This strength is also backed by robust iron ore prices, which have averaged over $140 per tonne for six months. Therefore, taking long AUD/USD positions could be a smart move to capitalize on expected dollar weakness against a stronger currency. In Europe, the Pound Sterling also appears strong, especially after better-than-expected UK retail sales data from last year. If this week’s PMI data shows stable economic growth, we may see GBP/USD build on its recent gains. The Euro’s outlook is less certain, pending fresh PMI data, so we’ll be watching to see if it can convincingly break above the 1.1750 level. The Japanese Yen continues to weaken due to fiscal concerns, even with the Bank of Japan keeping interest rates steady at 0.75%. This situation creates a confusing outlook for USD/JPY, as both currencies face challenges. It might be clearer to trade stronger currencies, like the Australian Dollar, against the Yen. Create your live VT Markets account and start trading now.

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