Brazil’s inflation rate for January was 0.2%, slightly below the expected 0.22%. This suggests that consumer prices are rising at a slower pace. The AUD/USD has hit a three-year high, boosted by rising Australian yields and a weaker US dollar. In contrast, the USD/CAD dropped to a six-month low as investors await important decisions from the Fed and the Bank of Canada.

Gold And Bitcoin Trends

Gold is holding strong near $5,100 per troy ounce, thanks to ongoing struggles of the US dollar, trade worries, and geopolitical issues. Bitcoin has stabilized around $88,000 after a 2% increase, influenced by a winter storm impacting its hashrate. EUR/USD remains steady above 1.1900 due to lower demand for the US dollar and changes in market sentiment. Similarly, GBP/USD has risen to multi-month highs around 1.3750 as reports emerged about rising trade tensions under President Trump. Additionally, the Axie Infinity gaming token jumped 3%, benefiting from increased demand following the bAXS token announcement. Trade tensions with South Korea, sparked by President Trump, are adding to market dynamics as focus shifts to central bank decisions and Australian inflation data. Reflecting on January 27, 2025, the market featured a struggling US dollar due to political trade fears. Now, in January 2026, the landscape has changed significantly, with the Federal Reserve taking a strong policy stance. The Dollar Index (DXY) is robust, trading at about 103.5, a sharp contrast to last year’s weakness.

Shift In Market Dynamics

Brazil’s inflation of 0.2% in January 2025 brought temporary relief to emerging markets. However, new data shows Brazil’s IPCA-15 inflation for January 2026 has risen to 0.31%. This suggests that inflation pressures are still present, and the central bank may need to stay alert. The renewed strength of the dollar has altered the foreign exchange landscape compared to 2025. The EUR/USD pair, which was above 1.19, and the GBP/USD, which hit 1.3750, are now trading lower at around 1.08 and 1.27, respectively. This trend indicates that strategies betting on dollar strength may be worthwhile in the upcoming weeks. Speculative excitement from last year, which pushed Bitcoin to $88,000, has significantly decreased. Higher interest rates are making cash more appealing, leading Bitcoin’s price to stabilize around $43,000 in early 2026. This suggests a more cautious trading environment compared to the riskier approach of 2025. Similarly, the remarkable rise in gold prices to nearly $5,100 an ounce last year appears to be an exception, fueled by geopolitical worries and a weak dollar. With the Fed tightening liquidity to control inflation, gold is now trading in a more stable range around $2,030. This normalization offers opportunities for traders to generate income on existing positions by using covered calls. Create your live VT Markets account and start trading now.

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