The UK’s Producer Price Index (PPI) Core Output for December dropped by 0.1% from the previous month, remaining steady at 0%. This decline shows how producer prices have changed. In the currency markets, the EUR/USD decreased to 1.1700 after a recent rise, while GBP/USD stayed below 1.3450 following mixed UK inflation data. The annual CPI inflation in the UK increased to 3.4% in December, up from 3.2% in November, with the core CPI also meeting expectations at 3.2%.

Gold and Cryptocurrency Market Trends

Gold, which was near an all-time high of $4,900, has corrected slightly, holding above $4,800. At the same time, Bitcoin, Ethereum, and Ripple saw corrections of 5%, 10%, and 5%, respectively, with indicators hinting at further downward trends. In the US, President Trump hinted at new tariffs on several European nations, proposing a 10% tariff starting on February 1. BNB, impacted by the crypto market drop, fell by 1% as retail interest in futures declined. FXStreet provides these insights, stressing the importance of thorough research before investing due to risks involved. The information shared is not investment advice or recommendations from FXStreet. With gold staying above $4,800, we may soon see a test of the $4,900 record high. The flight to safety arises from the risk of new US tariffs on the EU, making call options on gold or gold-backed ETFs appealing. Similar safe-haven buying occurred during geopolitical tensions in 2024 and 2025.

Euro Vulnerability and US Tariff Threat

The Euro is especially weak ahead of the US President’s speech, struggling near 1.1700. Confirmation of the 10% tariffs would hurt, given that US-EU trade in goods was over $900 billion in 2024. Traders might consider buying put options on the EUR/USD to directly address this risk. We are witnessing a fragile rebound in equity futures after a sharp decline, but this relief may not last long. The market’s fear is tangible, reminding us of the October 2025 volatility spike when the VIX soared above 20. Hedging portfolios by purchasing puts on major indices like the S&P 500 is a sensible strategy until the trade situation becomes clearer. In the UK, mixed data shows consumer inflation rising to 3.4%, while producer prices fell by 0.1%. Typically, rising inflation would boost the Pound, but global risk aversion keeps it below 1.3450. The tariff threat, which includes the UK, is likely to limit significant gains for now. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now