The latest CFTC report shows a significant drop in GBP net positions, shifting from £-4.5K to £-168K. This suggests a change in how traders view the currency compared to earlier data. In market news, WTI oil prices have fallen below $58.50 as hopes for peace between Russia and Ukraine linger. Silver is stabilizing below mid-$58.00, staying close to its all-time high.

NZD/USD Strengthening

The NZD/USD is gaining strength around 0.5750, thanks to positive Chinese PMI data and expectations of interest rate cuts. The Australian Dollar is also nearing a three-week high against the USD, bolstered by a hawkish stance from the RBA, despite weak GDP figures. In other updates, China’s RatingDog Services PMI dropped to 52.1 in November, slightly under expectations. The PBOC set the USD/CNY reference rate at 7.0754, a slight decrease from before. The EUR/USD pair saw a small rise of 0.12% due to rising rate cut expectations from the Fed and high Eurozone inflation. GBP/USD remains stable near 1.3200 as traders await rate cut signals from major central banks. Gold prices climbed above $4,200, supported by geopolitical concerns and a weaker USD. Bitcoin’s price is above $87,000 amid ongoing market pressure, with potential interest rate hikes from the BoJ adding to a bearish outlook.

Significant Shift In Sentiment

There’s a notable shift in sentiment against the British Pound, with speculative net short positions increasing from £4.5K to £168K. This shows that large traders are betting on a decline in the Pound’s value. This significant reversal is one of the largest bearish trends we’ve seen in several quarters. The market is focused on expected interest rate cuts from both the US Federal Reserve and the Bank of England. As of early December 2025, futures markets suggest an over 85% chance of a Fed rate cut this month, which is weakening the US Dollar against most currencies. However, the Pound is not capitalizing on this, staying weak near 1.3200 as traders expect the Bank of England to cut rates too. This situation presents a great opportunity for derivative traders, especially in the GBP/USD pair. With both central banks looking to ease policies, volatility is expected to rise. Buying put options on GBP might allow traders to profit from the growing negative sentiment while managing risk before the central bank meetings this month. Gold’s rise above $4,200 is a direct result of the weaker US Dollar and the expectations of lower interest rates. Historically, gold does well during Fed easing cycles, as seen after the policy pivots in 2019, since lower yields make non-yielding gold more appealing. This trend indicates that call options or long futures positions in gold could continue to gain if the Fed signals a dovish stance. The energy market is presenting a different opportunity, with WTI crude oil dropping below $58.50 amid hopes for peace between Russia and Ukraine. This situation is delicate, and any shift in geopolitical news could lead to a sharp price increase. Traders may want to consider strategies like straddles, using options to bet on significant price movements in either direction instead of choosing a specific side. While the US Dollar is generally weaker, currencies like the Australian and New Zealand Dollars are performing better due to their unique domestic factors. The Reserve Bank of Australia has kept a hawkish tone, supporting the AUD even with earlier weak GDP data from 2025. This highlights that, while the Fed is a major influence, individual country data is still causing noticeable differences in the forex markets. Create your live VT Markets account and start trading now.

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