The IFO Institute reported that Germany’s Current Assessment Index rose to 85.7 in January, up from 85.6. This index reflects the economic mood in Germany and indicates a slight improvement in business conditions. In the forex market, the GBP/USD has climbed to four-month highs around 1.3680. Gold prices have also hit record levels, surpassing $5,100, due to ongoing geopolitical uncertainties.

Cryptocurrency Markets Overview

In the cryptocurrency market, Bitcoin, Ethereum, and Ripple prices are slowly recovering after recent downturns. All three cryptocurrencies are approaching important support levels, which may affect their prices in the short term. Several economic factors are noteworthy this week, including central bank decisions, inflation data, and corporate earnings. These factors are likely to impact market activities and investor strategies soon. Forecasts for Cardano show possible downward risks, with the price potentially dropping to $0.27, while it currently sits around $0.34. The ongoing correction is supported by a decrease in open interest, indicating less market participation.

US Dollar Trends and Economic Implications

The US Dollar Index is continuing to drop, falling below 102 for the first time in three months. This decline follows last quarter’s reports indicating a slowdown in US wage growth, which is leading to speculation that the Federal Reserve may adopt a more cautious approach. This overall weakness in the dollar is what derivative traders should prepare for in the coming weeks. Germany’s slight increase in the IFO assessment to 85.7 doesn’t offer much comfort, as the overall business climate is still below 88, which shows weak performance compared to historical data. The Euro’s rise to 1.1900 is largely due to the dollar falling, not because of a sudden boost in European economic confidence. Options strategies betting on continued EUR/USD strength, like buying call spreads, might be a way to take advantage of this dollar-driven trend. The Pound Sterling is taking advantage of the dollar’s decline, reaching heights not seen since last autumn. Unlike the Euro, Sterling’s rise has some domestic backing, as UK inflation data from late 2025 continues to exceed that of the US, hovering around 3.8%. This suggests that the Bank of England may keep its policies tighter for an extended period, supporting GBP/USD. Gold breaking past $5,100 an ounce is a significant indicator, continuing a strong trend that began throughout 2025, where it rose over 40%. This increase is driven by the falling dollar and ongoing geopolitical tensions, elevating its status as a safe haven asset. However, traders should be cautious, as the US 10-year Treasury yield has quietly risen to 4.1%, which could pose challenges for an asset like gold that doesn’t yield returns. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now