In December, vehicle sales in the U.S. climbed to 16 million, up from 15.6 million in November. This increase highlights a positive trend in the automotive market. Gold also reached a one-week high due to safety concerns and speculation about Federal Reserve rate cuts. Meanwhile, the Japanese yen strengthened against the U.S. dollar, reflecting expectations about the Bank of Japan’s actions.

Global Trends

According to FXStreet data, gold prices rose in both Pakistan and India. The EUR/JPY currency pair stayed close to 183.50, waiting for Germany’s Consumer Price Index data to be released. Brokers in 2026 are focusing on markets with low spreads and high leverage. FXStreet provides information for readers, encouraging them to research and consider risks. We are witnessing mixed signals in the U.S. economy, which presents trading opportunities. The rise in total vehicle sales to a 16 million annualized rate in December 2025 indicates strong consumer health. However, the market is anticipating Federal Reserve rate cuts this year, typically seen during economic slowdowns. This expectation for looser monetary policy is putting pressure on the U.S. Dollar. The EUR/USD is gaining momentum above 1.1735, while the GBP/USD has eased slightly but remains close to its highest levels since September 2025, trading solidly above 1.3500. Any economic weakness could escalate this trend of selling the dollar.

Trading Opportunities

Gold is benefiting from this environment, surging over 2.5% to exceed the $4,450 mark. This rise is not just a move towards safety; it is also a firm bet against the dollar and lower real yields. Historically, gold tends to perform well when the Fed eases, as seen in the rally after 2019. We are seeing a divergence in monetary policy between the U.S. and Japan. While we expect the Fed to cut rates, the market predicts a more hawkish stance from the Bank of Japan amid concerns about currency intervention. This has allowed the yen to recover against the dollar, a trend that could strengthen if U.S. economic data weakens. In the upcoming weeks, a major source of volatility will be the Supreme Court’s decision on President Trump’s use of emergency powers for tariffs. With betting markets giving an 80% chance of him losing, we could see quick changes to protectionist measures. This suggests using options to trade the anticipated volatility in equity indexes and currency pairs related to global trade. Despite the bets on Fed cuts, we must not overlook the strength of the U.S. consumer, as shown by the auto sales data. This reflects steady consumer spending we saw in the last quarter of 2025. This underlying strength means traders should be careful about being too short on the dollar, as an unexpected inflation report could quickly shift Fed expectations. Create your live VT Markets account and start trading now.

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