The S&P Global Manufacturing PMI in the UK rose to 51.6 in January, up from 50.6 in December, indicating ongoing growth in the manufacturing sector. Surprises in UK retail sales and preliminary PMIs positively affected currency performance. The GBP/USD pair reached two-week highs around 1.3530, benefiting from slight gains in the US Dollar.

Gold Prices and Market Movements

Gold prices are nearing record highs, approaching $4,970 per troy ounce. Support from the uncertain US Dollar and lower US Treasury yields is driving this increase. Meanwhile, Bitcoin struggled below $90,000, dropping nearly 5% for the week due to volatility caused by geopolitical events. Looking ahead, the Fed is expected to pause interest rate cuts after three adjustments, and the Bank of Canada is likely to keep its rates steady. Upcoming meetings, including the potential nomination of Trump for Fed chair, may impact the markets. In the cryptocurrency space, Ethereum and Ripple are seeing lower demand, reflecting broader challenges in maintaining support levels amid difficult market conditions. For finance, a list of top brokers for 2026 provides valuable information for traders who want features like low spreads and Islamic accounts. The UK manufacturing PMI’s rise to 51.6 indicates a stronger-than-expected expansion in January, confirming the positive trends seen in last week’s retail sales. This data aligns with preliminary Q4 2025 GDP figures from the Office for National Statistics, which reported a 0.2% growth, helping the economy avoid a technical recession. This resilience suggests the slowdown from last year might be behind us.

Opportunities and Economic Divergence

There’s a chance to position for a stronger Sterling against the Euro and the US Dollar. Call options on GBP/USD, aiming for a rise above the 1.3600 mark, may be profitable in the coming weeks. The Bank of England may need to change its perspective and counter the rate cut expectations that grew late in 2025. The strength of the UK contrasts sharply with the slow performance in the Eurozone. For example, Germany’s latest flash manufacturing PMI unexpectedly dropped to 49.2, signaling ongoing industrial weakness. This economic divergence makes shorting EUR/GBP futures an attractive trading option. Despite some areas of strength, Gold’s approach toward $5,000 per ounce highlights real inflation concerns. The latest US CPI data from the Bureau of Labor Statistics reported core inflation remaining stubbornly high at 3.8% in December 2025, complicating the Federal Reserve’s decisions. Therefore, holding call options on Gold remains a sensible strategy against this persistent inflation and market uncertainty. Intel’s disappointing forecasts have created unease in the technology sector, reminding us of the high valuations at play. This weakness in tech contrasts with the stability we see in UK industrials, which could support the FTSE 100. A pair trade involving long FTSE 100 futures against put options on the Nasdaq 100 could strategically navigate this divergence. Create your live VT Markets account and start trading now.

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