The Impact of Gold and Cryptocurrency Movements The Bank of England recently lowered interest rates to 3.75%. This decision was more aggressive than many anticipated, causing the pound to strengthen slightly and market rates to rise. It’s still unclear if more rate cuts will happen in early 2024. Ethereum is currently priced at $2,920. There are concerns about rising state size, prompting the Ethereum Foundation to propose solutions. Possible options include state expiry, state archiving, and partial statelessness to tackle these concerns. UK retail sales have fallen short of expectations, highlighting a slowing economy. This is reflected in the recent Bank of England rate cut and a report from the Office for National Statistics showing a 0.2% contraction in UK GDP last quarter. In light of this weakness, we should think about strategies that could benefit from a declining or stable pound, like buying puts on the GBP/USD pair. Prospects for the US Dollar Despite soft inflation data, the US Dollar remains strong because traders are focusing on other factors. The US labor market is still robust, as shown by the November 2025 Non-Farm Payrolls report that added 210,000 jobs, keeping unemployment at a low 3.9%. This difference suggests that traders expect the Federal Reserve to maintain a more aggressive stance than other central banks, making it risky to bet against the dollar right now. The Bank of Japan’s recent decision to raise interest rates marks a major change in policy, even though the yen reacted quietly at first. This decision comes after Japan’s core inflation stayed above the 2% target for 18 months, recently reaching 2.8%. We should prepare for more volatility in yen pairs, making strategies that benefit from increased volatility on USD/JPY compelling. As we near the end of the year, a risk-averse attitude is prevailing, evident in the recent corrections in Bitcoin and Ethereum. The VIX index, which measures market fear, has been around 22 for the past month—much higher than the calmer sub-20 levels seen for much of 2025. This situation indicates that protecting portfolios against sudden market declines should be a priority in the weeks ahead. In the currency market, the difference in policies between a dovish European Central Bank and a more resilient Federal Reserve is pushing EUR/USD toward 1.1700. The expectation of this ongoing divergence is likely to continue putting pressure on the euro. We can take advantage of this trend by exploring call options on the US Dollar Index (DXY), which benefits from a stronger dollar. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now