Belgium’s Consumer Price Index (CPI) for December increased by 0.07%, a slowdown compared to November’s rise of 0.56%. This change shows a shift in inflationary pressures in the Belgian economy. Looking at global markets, US durable goods orders fell by 2.2% in October, worse than the expected drop of 1.5%. At the same time, the 4-week average of the ADP employment change rose to 11.5K in early December.

Exchange Rate Dynamics

The EUR/USD exchange rate dropped after strong US GDP data boosted the US Dollar. The EUR/CHF pair also declined, nearing one-month lows due to geopolitical tensions affecting the Swiss Franc. Gold prices fell after hitting record highs, driven by solid US growth data. In the cryptocurrency space, Bitcoin and Ethereum dropped in value as market sentiment shifted toward caution. In financial news, there are talks about potential changes in market priorities for 2026, which could impact growth, inflation, and geopolitical concerns. Various brokers are also being assessed for 2025, focusing on benefits like low spreads and leverage options for various trading needs.

Eurozone Inflation Trends

The significant drop in Belgium’s inflation to 0.07% aligns with a broader trend in the Eurozone. In the Euro area, the Harmonised Index of Consumer Prices (HICP) also fell to a two-year low of 2.4%, based on November 2025 statistics. This suggests that the European Central Bank may have to reconsider interest rate cuts sooner than expected. On the other hand, the US economy is showing robust growth, with the third-quarter GDP revised up to a strong 4.3% annual growth rate. This unexpected performance complicates the situation for the Federal Reserve, meaning predictions for the Fed Funds Rate will likely remain stable, reducing chances of rate cuts in the first half of 2026. This economic divergence supports the case for a stronger US dollar versus the euro. As the EUR/USD rate slips below 1.1800, strategies that take advantage of this weaker exchange rate seem appropriate. Options traders might look at put options on the EUR/USD pair to benefit from further declines as we enter the new year. Gold’s fall from its peak of $4,497 results from the renewed strength of the dollar. Typically, a strong dollar poses challenges for commodities priced in it. Therefore, we see any short-term increases in gold as possible selling points, and traders may consider using call spreads for a cautious bearish position. Finally, we should be aware of the low liquidity typical during the holiday season leading up to the new year. The risk-averse attitude in the cryptocurrency market, with Bitcoin struggling to maintain the $87,000 mark, could impact other assets and trigger exaggerated market movements. It may be wise to use options to guard against potential spikes in market volatility during this time. Create your live VT Markets account and start trading now.

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