In November, the UK’s industrial production rose by 2.3% compared to the previous year, exceeding the expected decline of 0.4%. This encouraging development contributed to stronger UK growth, influencing currency trading. The GBP/USD pair remained above 1.3400, even with a rising US Dollar. Recent US economic data suggests that the Federal Reserve may pause interest rate changes. This includes higher-than-anticipated numbers in the Producer Price Index and Retail Sales, along with a drop in the Unemployment Rate. Consequently, gold prices have stabilized around $4,600 after previously hitting a record high.

Cryptocurrency Market Declines

The cryptocurrency market faced a downturn after the US Senate Banking Committee delayed discussions on crypto regulations. This postponement occurred after Coinbase withdrew support, highlighting unresolved issues. The information shared is for informational purposes only and should not be seen as recommendations. Individuals should conduct in-depth research before making any investment choices, as the data may contain errors or uncertainties. Investing carries risks, including the potential loss of the entire investment. Both FXStreet and the author do not accept responsibility for any losses or inaccuracies. The unexpectedly strong UK’s industrial production data from last November, showing a 2.3% growth instead of a contraction, has shifted the landscape. This positive momentum was confirmed with the recent inflation data for December 2025, which showed a rate of 2.1%. This puts pressure on the Bank of England, and we might consider purchasing GBP call options during any downturn, especially since the central bank recently showed a 7-2 split in favor of a potential rate hike.

US Economy Shows Robust Strength

Meanwhile, the US economy is demonstrating notable strength, which is limiting the pound’s rise against the dollar. The strong Non-Farm Payrolls report for December 2025 added 210,000 jobs, reinforcing the expectation that the Federal Reserve will keep interest rates steady. This economic tug-of-war suggests using range-bound strategies for GBP/USD, such as selling straddles or iron condors with boundaries around the 1.3400 and 1.3460 levels. This economic disparity places the Euro in a weak spot against the pound. Recent PMI data from the Eurozone shows a continued contraction in manufacturing, suggesting that the EUR/GBP may trend lower. Bearish strategies, such as buying put options on this pair, appear attractive in the coming weeks. The Federal Reserve’s likely pause on interest rates will continue to bolster the US Dollar, creating a ceiling for commodity prices. Gold is struggling to surpass last week’s record highs near $4,640. We see this as an opportunity to sell call spreads on gold, betting that a strong dollar will hinder any significant rally. Create your live VT Markets account and start trading now.

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