The Baker Hughes US oil rig count has hit 410, which is higher than the expected 407. This number is an important signal in the energy market and can influence broader market trends. US economic data continues to impact the forex market, with EUR/USD falling to 1.1600. This news dampens hopes that the Federal Reserve will ease its policies.

Gold And Currency Pair Movements

Gold has dropped below $4,600 due to profit-taking and uncertainty around Fed policies. At the same time, AUD/USD has fallen, as strong US economic performance makes early Fed rate cuts less likely. USD/JPY has decreased to 158.00 because of yen strength and worries about possible market intervention. WTI oil prices are starting to rise as tensions in Iran lessen, but a supply surplus keeps significant price hikes in check. Looking ahead, traders are focused on the upcoming US PCE report and the Davos meeting. The Bank of Japan also has a meeting scheduled, which raises market anticipation. Several brokers have been assessed for forex trading in 2026 based on aspects like spreads, leverage, and account types. FXStreet offers educational information; however, investment choices should be made independently. With unexpected strength in the US economy, the market is delaying its expectations for Federal Reserve rate cuts. The recent jobs report for December 2025, which showed an addition of 210,000 jobs, supports this idea. As a result, Fed funds futures now indicate less than a 30% chance of a rate cut by March, down steeply from a 70% chance just last month.

Impact On The US Dollar And Gold

This change in rate expectations is boosting the US Dollar, with the Dollar Index (DXY) surpassing 105.50 for the first time since last November. We’re preparing for potential declines in currency pairs like EUR/USD and AUD/USD because their central banks are expected to ease policies sooner than the Fed’s. Selling out-of-the-money call options on the Euro could be a good strategy to benefit from this difference. In the energy market, the Baker Hughes rig count of 410 indicates a slight but significant uptick in future supply. Although this count is lower than pre-2020 figures, it marks the third straight weekly increase, suggesting producers are responding to the stable price environment seen in late 2025. This data strengthens the belief that a supply surplus will likely limit any major increases in WTI crude oil prices, making long-dated put options a wise hedge. Gold’s drop below $4,600 is a typical reaction to a stronger dollar and rising real yields, which have now crossed the 2.0% mark on the 10-year Treasury note. In this situation, holding a non-yielding asset like gold becomes more expensive. This pattern was evident in 2022 when the Fed’s aggressive rate hikes stopped a significant gold rally, and we expect similar challenges now. With the important US PCE inflation report and the Davos meeting approaching next week, we anticipate a surge in market volatility. The VIX has already begun to rise, moving towards 16 from its recent lows. Traders might want to consider buying options to take advantage of this uncertainty, such as purchasing straddles on major indices before the data release to profit from significant price movements in either direction. The Japanese Yen stands out amid the stronger dollar, with USD/JPY dropping to around 158.00. This is not so much about dollar weakness but rather due to rising fears of intervention from the Bank of Japan, which has a meeting next week. With USD/JPY near the 160.00 mark that triggered intervention in 2024, buying puts on USD/JPY can be a way to safeguard against sudden policy changes from Tokyo. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now