Pending home sales in the United States fell by 3% in December compared to the previous year, down from a growth of 2.6%. This drop shows how the housing market is changing due to broader economic factors. In other economic news, Australia is expected to see a rise in unemployment for December. At the same time, geopolitical issues around Greenland and actions by President Trump are impacting markets, including Forex, gold, and the USD/JPY currency pair.

Forex Markets Update

The EUR/USD fell below 1.1700 due to a bounce back in the U.S. Dollar. The GBP/USD hovered around 1.3430, responding to small gains in the US Dollar and reactions to global political events. Gold prices have corrected slightly but remain close to an all-time high of $4,900 per troy ounce, showing cautious behavior in the market. Meanwhile, AI tokens and cryptocurrencies like ICP are struggling due to ongoing geopolitical tensions. President Trump spoke at the World Economic Forum in Davos, emphasizing U.S. interests in Greenland. Cryptocurrencies like Monero are continuing to decline, dropping below $500 with a significant 38% decrease from its previous high. FXStreet offers market insights while stressing the importance of being aware of risks, as open market investments are often volatile. We’re witnessing a clear downturn in the U.S. housing market, with pending home sales now negative. This -3% year-over-year change follows a growth period and serves as a warning sign for the economy. This decline resembles what happened in late 2023 when rising interest rates also cooled the market, suggesting that the Federal Reserve may need to rethink its approach.

Gold and Currency Market Dynamics

Uncertainty regarding Greenland continues to drive investors to safer assets, keeping gold prices high near $4,770 an ounce. Although the President has dismissed military action, any new developments could push gold toward its previous all-time high of $4,900. Therefore, it could be prudent to use options to trade in this high-volatility environment instead of placing straightforward bets on gold. We’re seeing a split among safe-haven currencies. The U.S. Dollar is gaining against the Euro, while the Yen remains weak, with USD/JPY close to 158.00. This weakness in the Yen is likely due to Japan’s fiscal challenges, a trend that intensified back in 2024 as the currency weakened beyond historic levels because of interest rate policies. This situation indicates ongoing volatility and opportunities to trade based on differing currency strengths. Create your live VT Markets account and start trading now.

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