Japan’s construction orders soared in December, rising 20.2% compared to last year, up from 9.5%. In the meantime, the US Dollar remains steady against many currencies, with notable shifts in pairs like USD/INR, as the Indian Rupee weakens. The EUR/USD has bounced back, moving above 1.1900, while GBP/USD holds steady above 1.3750. Gold is seeing downward pressure due to the strong US Dollar, with the focus on the $5,100 level.

Cryptocurrency Market Dynamics

The cryptocurrency market is experiencing a sell-off, impacting Bitcoin, Ethereum, and Ripple. In the corporate world, Microsoft has faced a steep decline, losing $400 billion. Forex brokerage firms are being assessed to identify the best brokers for 2026. They are evaluated based on criteria like low spreads, high leverage, and specialized accounts such as Islamic and swap-free options. FXStreet urges caution by discussing investment risks and emphasizes the need for thorough research. They clarify that the information shared isn’t specific investment advice. This general information aims to enhance understanding of market conditions but comes with a warning about possible errors or omissions. The strength of the US Dollar is a key focus, driven by uncertainty about the next Federal Reserve Chair appointment. This trend was supported by the recent December 2025 inflation report, which showed a surprising 3.9% CPI and decreased expectations for immediate rate cuts. It may be wise to position for further dollar gains through futures or call options against other major currencies.

Gold Market Pressure

This situation is putting considerable downward pressure on Gold, which is now testing the $5,100 per ounce mark. After a major rally throughout 2025, in response to ongoing inflation over the past two years, we are now seeing a pullback. Taking bearish positions, such as buying put options on XAU/USD, might be beneficial if the dollar continues its climb. A clear risk-off sentiment is evident in equities, highlighted by Microsoft’s recent $400 billion sell-off. This has caused the VIX, a measure of market fear, to rise above 25 for the first time in months, a significant increase from its recent low of 18. Hedging with index puts on the S&P 500 or Nasdaq 100 seems wise until this volatility eases. The upcoming Q4 2025 GDP data for Germany and the Eurozone will be crucial for the EUR/USD pair. Predictions indicate a stagnant economy, with some analysts forecasting a slight contraction of -0.2% for the quarter, which could further weigh on the Euro. A drop below the 1.1900 level could lead to a more significant downward move. An exception to the dollar’s strength might come from Japan. The unexpected surge in Japanese construction orders to 20.2% signals solid domestic economic health. This could pressure the Bank of Japan to shift towards a less dovish policy, creating potential challenges for the USD/JPY pair. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now