The UK’s Rightmove House Price Index rose by 2.8% in January after a drop of 1.8%. This indicates that house prices are starting to increase as the year begins. China’s economy grew by 1.2% in the fourth quarter of 2025, better than the expected 1.0%. The People’s Bank of China set the USD/CNY reference rate at 7.0051, down from 7.0078.

Currency Movements

The EUR/USD currency pair is nearing 1.1650, despite rising risk aversion. In contrast, the GBP/USD has strengthened to around 1.3400 due to tariff threats from the U.S. Gold prices have skyrocketed to over $4,650, driven by disputes over Greenland. This spike coincides with a weakening U.S. Dollar after it reached a recent peak. Upcoming economic indicators such as the U.S. PCE and announcements from Davos may influence currency movements. The Bank of Japan is likely to keep its current stance, while the UK’s CPI and retail sales data could affect forecasts for the Bank of England. Gold’s rise to an all-time high above $4,650 offers a clear opportunity, especially due to the U.S.-Greenland tariff dispute. This safe-haven move recalls the gold rally seen during the U.S.-China trade tensions in 2019, when gold prices surged over 20% in just a few months. We should consider buying call options on gold futures (GC) to take advantage of increased safe-haven demand.

UK Housing Market and Interest Rates

UK house prices have unexpectedly jumped, with the Rightmove index increasing by 2.8% in January after a decline in December 2025. This strong domestic data conflicts with market expectations for more Bank of England rate cuts, which could lead to volatility. We might consider GBP/USD call options to capitalize on the currency’s strength, especially as it approaches 1.3400 against a weak dollar. The U.S. Dollar is broadly weakening, primarily due to political risks from tariff threats and internal tensions with the Federal Reserve. This has pushed the Dollar Index (DXY) to multi-week lows, a trend seen during previous periods of political uncertainty, such as the 2013 government shutdown. Shorting the dollar using put options on USD futures or currency ETFs seems wise for the upcoming weeks. Looking ahead, the U.S. PCE inflation data and remarks from the World Economic Forum in Davos will be key events. With the VIX (Volatility Index) already above 20 points due to the Greenland situation, we expect more volatility. Traders may consider buying straddles or strangles on major indices like the S&P 500 to profit from significant price movements in either direction. Create your live VT Markets account and start trading now.

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