In December, net lending to individuals in the United Kingdom reached £6.1 billion, matching predictions. This figure is in line with economic expectations. Globally, various financial activities are also happening. The USD/JPY rate has fallen below 154.00, while the EUR benefits from a positive growth outlook and remains stable.

Gold Market Trend

In the gold market, prices have dropped because of profit-taking and a stronger US dollar. The CAD shows steady growth, but the USD continues to impact its value. Several big financial shifts have taken place recently. The GBP/USD is nearing 1.3800, and gold has risen above $5,100 after the announcement about the Fed Chair. Looking to the future, traders in 2026 can find tips on choosing the best brokers. They can choose from cost-effective options to specialized brokers for high leverage, each offering unique pros and cons. The UK’s December net lending figure of £6.1 billion indicates a surprising strength in consumer borrowing. In contrast, throughout 2024, the average was only £1.7 billion per month, suggesting that British consumers are more confident than expected. This economic health is likely to limit downside potential for the pound, making aggressive short positions on GBP risky in the near term.

Fed Chair Appointment

The appointment of Kevin Warsh as the new Fed Chair is a major market influence right now. His historically hawkish stance shows a strong commitment to raising interest rates, a significant shift from early 2020s policies. The recent dip in the dollar seems to be a short-term reaction, and traders should prepare for ongoing USD strength in the coming weeks. With EUR/USD climbing toward the 1.1950 resistance level, there may be opportunities to sell call options or set up other bearish structures. Europe’s stable inflation is a positive factor, but it likely won’t compete with the newly aggressive Federal Reserve. The market is giving us a favorable entry point to position for a stronger dollar against the euro. Gold’s drop from over $5,100 an ounce directly relates to the new Fed leadership. A stronger dollar and higher interest rates are typically negative for assets that don’t yield income, and we expect this correction to continue. Traders should consider buying put options to benefit from further downward momentum. The broad sell-off in technology and crypto assets shows a serious risk-off sentiment similar to the contagion seen during the digital asset crash of 2022, where weakness quickly spread across markets. Volatility is expected to stay high, so traders should look for strategies that profit from significant price swings rather than focusing on a specific direction in riskier asset classes. Create your live VT Markets account and start trading now.

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