Australia’s National Australia Bank reported that the business confidence index rose from 1 to 3 in December, showing an improvement in business sentiment compared to the previous month. The article also covers forecasts and analysis regarding commodities and currency pairs, including insights into EUR/USD and GBP/USD movements.

Trends Affecting Commodity Markets

There’s a discussion about trends impacting gold, silver, and cryptocurrencies. The article emphasizes the importance of staying updated on economic trends for better trading decisions. In December 2025, we saw a small rise in Australian business confidence, which was a slight positive sign. However, the recent Q4 inflation report released last week is more crucial. It showed the Consumer Price Index (CPI) cooling to 3.1%, slightly below what was predicted. This may change the outlook for the Reserve Bank of Australia (RBA) as we approach February. Reduced inflation lowers the chances of an RBA rate hike in the near future, a scenario that had been expected at the end of last year. As a result, we are considering option strategies that could profit from a potential decline or stable movement of the Australian dollar against the US dollar. For example, selling AUD/USD call options with a strike price around 0.6800 could take advantage of limited upside.

Australian Labor Market and Inflation

We also need to look at the December jobs report released two weeks ago, which revealed the unemployment rate steady at 3.9%, exceeding expectations. This contrast between a strong job market and softening inflation creates uncertainty, leading to increased implied volatility on AUD currency pairs. In this situation, buying straddles on AUD/USD could be a smart move ahead of the next RBA meeting, allowing us to profit from significant price changes in either direction. For traders focused on equity indices, the reduced likelihood of a rate hike is favorable for the ASX 200. Recall how the index faced challenges during the rate hike cycle in 2024; this shift in monetary policy expectations might lead to further gains. Therefore, buying call options on ASX 200 futures or selling out-of-the-money puts presents a bullish strategy with limited risk. On a global scale, ongoing signals of a policy change from the U.S. Federal Reserve are applying broad pressure on the US dollar. Typically, a weaker dollar boosts commodity prices, as we observed with gold’s rise throughout 2023. This macro trend supports long positions in silver futures or options, benefitting from a declining dollar and continued industrial demand. Create your live VT Markets account and start trading now.

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