The Russian Producer Price Index (MoM) dropped to -1.6% in December, down from -0.9% earlier. This indicates that the prices for produced goods are falling, which may affect market conditions in related areas. The Federal Reserve has decided to keep the Fed Funds Target Range steady at 3.50%–3.75%. This decision matches market expectations and shows confidence in the economy’s current state.

Currency Market Pressure

The EUR/USD pair remains under pressure around the 1.1950 mark. This follows the US dollar’s recovery after recent Federal Open Market Committee meetings, with upcoming US labor data grabbing attention. In the commodity markets, gold hit a new high of $5,311 but has pulled back slightly. It remains strong, stabilizing below $5,300 in light of recent Federal Reserve policy changes. Ethereum struggles to hold the $3,000 mark due to changing on-chain metrics. In contrast, Bittensor’s TAO token has surged above $240, reflecting positive feelings in the crypto market. Tesla shares rose by 3% after reporting earnings that exceeded expectations. Meanwhile, Microsoft’s stock fell despite a good quarterly report, and Meta Platforms saw its shares climb over 4%.

Market Dynamics and Trading Opportunities

The Federal Reserve’s choice to maintain interest rates at 3.50%-3.75% is a key factor pushing gold to record highs over $5,300. A similar situation happened in late 2023 when the market anticipated a Fed pivot, which led gold to break through $2,100. With inflation persisting above 4% at the end of last year, positioning for more upside in gold through futures or call options seems wise. Now that the Fed is stationary, the US Dollar is losing its crucial support, even with a small recent rebound. This presents a chance to explore currency pairs like EUR/USD and GBP/USD since central banks in Europe have indicated a more hawkish approach for late 2025. Traders might consider using options to bet against the dollar, as this policy divergence could pressure the Greenback in upcoming weeks. The stock market is shifting from a unified approach, with individual earnings from Tesla and Meta influencing results. This points to a move away from general index trading towards more targeted strategies. With the CBOE Volatility Index (VIX) elevated near 21, reflecting ongoing “yield jitters,” buying straddles on key tech stocks before their earnings could profit from expected price fluctuations. Create your live VT Markets account and start trading now.

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