In December, industrial production in the United States increased by 0.4%. This was better than the expected 0.1% rise, indicating stronger activity in the industrial sector. Other topics include fluctuations in currency and commodity markets. The GBP/USD saw volatility, while Gold prices dipped below $4,600 per troy ounce due to a stronger US Dollar. The cryptocurrency market struggled as well, with Bitcoin staying above $95,000, despite a drop in retail interest.

Looking Ahead

Looking forward, market analysts are expecting data releases, such as the US PCE and PMI numbers, along with events like Davos that could shape expectations for Federal Reserve policies. The Bank of Japan is likely to continue its current policies, with close attention to guidance after upcoming elections. There is also growing interest in trading platforms and forecasts for key assets like Dash, which gained retail interest and saw price increases amid broader market corrections. A guide to top brokers in 2026 highlights effective trading standards for currencies and commodities. The unexpectedly strong US industrial production data from December has changed our short-term outlook. This indicates that the American economy is doing better than we thought, which could delay Federal Reserve interest rate cuts. As a result, we expect the US dollar to remain strong in the coming weeks.

Trading Strategies

We suggest that traders consider purchasing call options on dollar-tracking ETFs or selling put options on currency pairs like AUD/USD. The market has reacted quickly, and now Fed Funds futures show only a 30% chance of a rate cut in March, down from over 60% just two weeks ago. This shift away from an early cut is a key trend to watch. This situation reminds us of late 2024, when several positive economic reports delayed the Fed’s anticipated transition to easier policies. Thus, positions that bet on interest rates remaining high for longer, like selling near-term Eurodollar futures contracts, could be profitable. The main risk to monitor is the upcoming Personal Consumption Expenditures (PCE) inflation report. Gold appears shaky now, as a stronger dollar and higher interest rates create challenges for the metal. After failing to stay above $2,300 per ounce last week, it may test lower support levels. Options traders might consider buying puts on gold futures to capitalize on this expected weakness. For foreign exchange traders, a strengthening dollar brings attention to the USD/JPY pair. We are nearing levels that prompted warnings from the Bank of Japan in 2025. If the pair surpasses the 159.00 mark, we could see increased volatility as the market tests the central bank’s determination. Create your live VT Markets account and start trading now.

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