GBP/USD reaches highest level since mid-September as it strengthens against the US dollar, influenced by UK data
The GBP/USD pair reached its highest point since mid-September, trading around 1.3660 during the European session. This rise was fueled by stronger-than-expected UK Retail Sales and PMI data. Later today, the release of the US November Durable Goods Orders report could influence currency movements.
UK Retail Sales, reported by the Office for National Statistics, increased by 0.4% in December, recovering from a 0.1% decline in November. This was better than the predicted further 0.1% drop. The British Pound’s strength is also linked to a generally weaker US Dollar, which fell to a four-month low today.
GBP/JPY pair falls nearly 1% to around 210.40 after Takaichi’s intervention warning
GBP/JPY dropped near 210.40 after Japan warned it might intervene to support the Yen against speculative trading. The Bank of Japan kept interest rates at 0.75%, while positive UK data boosted the Pound last week.
The exchange rate fell almost 1% as the Yen gained strength following comments from Japanese PM Sanae Takaichi about market speculation. The Yen became the strongest currency against the US Dollar, with a rise of 1.14%.
Statements From Takaichi
Takaichi mentioned that the government would act against speculative market movements, but did not discuss specific levels. The Bank of Japan held its interest rate steady at 0.75% and indicated that it might raise rates in the future. The performance of the Yen depends on various factors, including economic conditions, BoJ policies, bond yield differences, and overall market sentiment. The previous very loose monetary policies weakened the Yen, but recent changes are providing some support. Earlier, the disparity in US and Japanese bond yields favored the US Dollar, but recent rate changes are closing that gap. The Yen often attracts safe-haven investments, becoming stronger during times of uncertainty. Last week, positive data on UK Retail Sales and PMI helped the Pound, which is now showing mixed trends. Retail Sales increased by 0.4% month-on-month.Impact Of Past Events
We saw a similar situation in 2025 when the GBP/JPY fell toward 210.40 due only to verbal warnings from Japanese officials. Just the threat of intervention caused a significant sell-off, and that caution has lingered in the market. Now, with GBP/JPY near 205.50, memories of that time are still fresh. Since 2025, the Bank of Japan has acted on its hints about tightening, raising its key interest rate to 1.00% to combat inflation, which reached a multi-decade high of 3.5% late last year. This has changed the interest rate advantage that used to favor the Pound Sterling. For traders in derivatives, this may signal the end of favorable conditions for shorting GBP/JPY volatility. The narrowing yield gap lessens the appeal of carry trades, which could weaken support for the pair. Strategies that benefit from stable market conditions or a further decline in the currency pairing should be considered. A key lesson from 2025 was the impact of “jawboning,” which leads to sudden volatility spikes. Implied volatility on GBP/JPY options has remained high since then, currently around 11.5% for 3-month contracts, compared to an average of 9% in late 2024. This presents an opportunity for those selling premium but comes with risks of sharp, unpredictable changes. Examining bond yields, the difference between 10-year UK Gilts and Japanese Government Bonds has narrowed significantly, reducing by over 50 basis points in the past year, from about 3.5% to just below 3.0% now. This decrease in yield advantage for the Pound supports a lower ceiling for the GBP/JPY exchange rate. Given these trends, using options to hedge against downside risk while holding long Pound positions is advisable. Buying put options on GBP/JPY could protect against another sudden strengthening of the Yen, similar to the threat in 2025. Any rallies back to the 210.00 level should be approached with caution. Create your live VT Markets account and start trading now.In early European trading, GBP/USD rises above 1.3660 on strong UK economic indicators
The GBP/USD rate has risen to about 1.3660, its highest point since mid-September 2025. This increase comes from strong UK Retail Sales and Purchasing Managers Index (PMI) data that exceeded expectations.
State of UK Retail Sales
UK Retail Sales grew by 0.4% in December compared to November, which had seen a 0.1% decline. Core Retail Sales, excluding auto fuel, also increased by 0.3% in December, beating the predicted 0.2% drop. Additionally, the UK Composite PMI hit a 21-month high of 53.9 in December. Some analysts believe these positive results could postpone any planned rate cuts by the Bank of England. There’s an expectation of maintaining current rates at the February meeting, with a possible cut by June. The US Federal Reserve is likely to keep interest rates stable in its upcoming meeting, but traders will watch for comments from Chair Jerome Powell that could change market expectations. The Pound Sterling is the fourth most traded currency worldwide, with key pairs being GBP/USD. The Bank of England’s monetary policy aims for a 2% inflation rate, which greatly influences the Pound’s value. Economic data and trade balance also significantly affect the Pound’s strength. The increase in GBP/USD above 1.3650 was fueled by strong UK economic data from late 2025. December’s Retail Sales in the UK unexpectedly rose by 0.4%, contrary to predictions of a decline. This trend indicates that the UK economy may be more resilient than previously thought. After this period, the US Federal Reserve kept interest rates steady during its January meeting, but the commentary was seen as less dovish than expected, causing a pause in the pair’s rally. Recent US data showed a slight rise in Initial Jobless Claims to 218,000, suggesting a cooling labor market that supports a patient Fed when considering rate cuts.Outlook and Strategy
Recent UK data revealed the Consumer Price Index (CPI) for December 2025 remained at 3.9%, against expectations of a drop to 3.7%. This steady inflation bolsters the belief that the Bank of England may be one of the last major central banks to lower rates. This policy difference is a key factor likely to support the Pound against the Dollar. In this context, consider positioning for further GBP strength while managing the risk of short-term dropbacks. One option is buying GBP/USD call options set to expire in March 2026 with a strike price around 1.3750. This offers a defined-risk way to tap into potential gains as the bullish trend may continue after the current consolidation. For a more cautious approach, you could implement a bull call spread by selling a call with a higher strike price, like 1.3900, while purchasing the 1.3750 call. This strategy reduces the initial trading cost but limits maximum profit, making it suitable for a steady upward move. Historically, similar policy divergences, seen between the Fed and ECB in 2022, can result in sustained, though modest, currency trends. Implied volatility is projected to rise as the Bank of England’s meeting in early February approaches. This makes selling premium, like in the bull call spread, more appealing now. Traders should closely watch volatility levels, as significant spikes could create better entry points for long-volatility strategies or signify greater market uncertainty. Create your live VT Markets account and start trading now.Gold prices have risen in Saudi Arabia, according to recent data.
Gold prices in Saudi Arabia rose on Monday, according to FXStreet data. The price for gold reached 611.22 Saudi Riyals (SAR) per gram, up from SAR 600.56 on Friday. Gold per tola increased to SAR 7,129.12 from SAR 7,004.76 the previous Friday.
FXStreet updates these gold prices by converting international USD prices to SAR. Although these prices are updated daily based on market rates at the time of publication, they might vary slightly from local prices. Gold is often seen as a stable asset during uncertain economic times and is used to protect against inflation and currency decline.
Central Banks and the US Dollar
Central banks own the largest amounts of gold. In 2022, they purchased a significant 1,136 tonnes worth around $70 billion. Gold prices usually rise when the US Dollar falls. Economic instability and changes in interest rates also affect gold prices. A strong US Dollar tends to lower gold prices, while a weak Dollar usually increases them. Currently, gold is continuing its upward trend, recently surpassing the $5,000 mark. This is happening as the US Dollar weakens against other major currencies. The expected rise in gold due to the Dollar’s decline is occurring as anticipated. This trend is further supported by strong buying from central banks throughout 2025. Reports from the World Gold Council showed that in the fourth quarter of 2025, central banks added another 350 tonnes to their reserves, making it the sixth straight quarter of heavy accumulation. This ongoing demand from official sources provides strong support for prices and indicates a long-term shift away from dollar-based assets. Geopolitical tensions, like potential US government shutdowns and trade disputes over Greenland, are driving investors toward safe assets like gold. For traders in derivatives, this suggests that taking long positions on gold futures or buying call options on gold ETFs could be wise in the coming weeks. Since volatility is high, managing costs with strategies like bull call spreads might be beneficial while pursuing further gains.Federal Reserve and Interest Rates
In 2025, the Federal Reserve shifted away from aggressive interest rate hikes, indicating that rates had peaked. This change has positively affected gold prices, as lower rates reduce the opportunity cost of holding gold, which doesn’t yield interest. If the market expects rates to remain steady or decline, investors are likely to invest more in gold. Create your live VT Markets account and start trading now.Recent data shows an increase in gold prices in the Philippines.
Gold prices in the Philippines went up on Monday, according to FXStreet data. The price per gram increased to 9,613.17 Philippine Pesos (PHP), up from 9,443.63 PHP on Friday. The cost for a tola also rose to PHP 112,126.10 from PHP 110,148.70.
FXStreet determines gold prices in the Philippines by adjusting international prices (USD/PHP) to the local units. Prices are updated daily based on the current market rates.
Gold as a Safe Haven Asset
Gold is seen as a reliable asset during tough economic times. It acts as a safe haven and protects against inflation because it’s not tied to any government. Central banks hold gold mainly to support their currencies when things get rocky. In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion, with many emerging economies growing their reserves quickly. Gold prices usually move oppositely to the US Dollar and Treasuries. When the Dollar weakens, gold prices often rise, making gold appealing during uncertain times. Economic instability or recessions can drive gold prices higher due to its safe-haven reputation. Gold’s value often shifts based on the strength of the US Dollar. The recent rise in gold prices shows its increasing popularity as a safe-haven asset amid uncertainty. We’re seeing higher demand due to renewed geopolitical tensions that cause volatility in stock markets. Derivative traders should recognize this as a sign that the bullish sentiment around gold is getting stronger. This surge is backed by strong institutional buying, a trend we’ve noticed increasing throughout 2025. New data from the fourth quarter of 2025 shows that central bank purchases surpassed 1,150 tonnes, setting a new record above the previous high from 2022. This steady demand from major global players creates a solid price floor, suggesting that any dips will be good buying opportunities.Impact of the US Federal Reserve
We also need to think about the actions of the US Federal Reserve, as gold prices tend to move in the opposite direction of the dollar. After last week’s US inflation report came in slightly above expectations at 3.1%, the dollar weakened. This raises the likelihood that the Fed may start reducing interest rates by the second quarter, which is positive for gold and other non-yielding assets. In this environment, traders should consider strategies to take advantage of potential price increases in the coming weeks. Buying call options or creating bull call spreads on gold futures can be effective ways to benefit from rising prices while clearly managing the maximum potential loss. However, managing risk is crucial, as markets can be unpredictable. We witnessed a similar trend in late 2024 when gold reached new highs before a brief and sharp correction. Therefore, traders using futures contracts should employ disciplined stop-loss orders to protect their capital from sudden downturns. Create your live VT Markets account and start trading now.The Japanese leading economic index was 109.9, falling short of expectations.
Gold Rally
Gold has now risen for six days in a row, reaching $5,100. This boost comes as more investors seek safe-haven assets due to global uncertainties. Bitcoin, Ethereum, and Ripple have bounced back slightly after falling over 7%, 14%, and 7% in recent times. Cardano’s price is around $0.34, but it faces more downside risks. This is reflected in declining Open Interest, which shows that fewer people are participating in the market. Although the US government has backed off on tariffs against Europe, tensions across the Atlantic continue. FXStreet provides guides on the best brokers for trading in 2026, looking at factors like low spreads, high leverage, and specialized accounts. Investors should do thorough research before investing, as markets come with risks and uncertainties.Market Volatility
With the record-high gold rally, now may be a good time to buy call options to benefit from this strong upward trend. Gold’s rise past $5,100 is fueled by ongoing geopolitical worries and a weaker US Dollar. This demand for gold is backed by central banks buying aggressively—especially since 2022. The US Dollar is under continued pressure, signaling a chance to act ahead of the Federal Reserve’s meeting this Wednesday. We may see further dollar weakness, making it wise to buy put options on the US Dollar Index (DXY) or call options on currency pairs like EUR/USD, which is close to a four-year high. Historically, the dollar index has dropped sharply from its 2022 highs, and a dovish stance from the Fed could push it lower. The Japanese Yen is gaining strength due to speculation about Bank of Japan intervention and a more hawkish policy. This opens up strategies like selling USD/JPY futures or buying put options on this pair. The BOJ has hinted at moving away from its very loose policies, similar to the shift we saw in 2024, making tightening likely. The British Pound is also strong, reaching its highest point against the dollar since September 2025 thanks to solid UK economic data. This helps the anti-dollar trend, making long positions in GBP/USD through call options a smart choice. The UK data has repeatedly exceeded expectations throughout 2025. With significant announcements from central banks and ongoing trade tensions, market volatility is expected to remain high. Traders should consider using options to protect their positions or speculate on large price movements. For example, buying straddles on major indices or currency pairs before Wednesday’s Fed announcement could be a wise trading strategy. Additionally, WTI crude oil is holding steady around $61.00 per barrel amid rising supply concerns. In this environment, looking at long positions—possibly through call options on oil futures—would be prudent. Any increase in supply disruptions could lead to a quick price spike from these levels. Create your live VT Markets account and start trading now.Japan’s Coincident Index decreases to 114.9 from 115.2
Japan’s coincident index dropped to 114.9 in November, down from 115.2. This change comes amid various market shifts and currency pair movements.
The EUR/USD pair is close to a four-year high at 1.1920. In contrast, the GBP/USD trades positively around 1.3660 after strong economic data from the UK.
Market Rally Influencers
Gold is on a six-day rally, hitting $5,100 during the Asian session. Bitcoin, Ethereum, and Ripple have shown signs of recovery after major corrections. In trade news, the U.S. has pulled back its proposed tariffs on key European economies. Cardano (ADA) is now priced around $0.34, following weeks of adjustments. A variety of broker options for 2026 are available, including those with low spreads, high leverage, and market-specific features. These options aim to meet different trader needs and preferences. With Gold exceeding $5,100, there is a clear movement towards safety due to global uncertainty. This dramatic price action indicates high implied volatility, making it a good time to explore protective put options on broader equity indices. This trend aligns with record central bank gold purchases in the second half of 2025, similar to the significant buying we saw in 2022 and 2023.Currency Market Dynamics
The US Dollar’s ongoing weakness is a key focus ahead of the Federal Reserve’s meeting this Wednesday. In this context, we expect EUR/USD and GBP/USD to remain strong, making long call options a smart strategy for capturing potential gains while limiting risks. Current market pricing suggests over an 85% chance that the Fed will indicate a dovish approach, putting further pressure on the dollar, similar to the trends seen in late 2023. We should closely watch the Japanese Yen, which is strengthening amid expectations of a hawkish Bank of Japan. This speculation is driven by core inflation figures that have stayed above the bank’s 2% goal for much of 2025, a situation not seen in decades. However, the risk of official action to weaken the Yen is significant, creating a volatile trading environment ideal for option straddles on USD/JPY. The Euro and British Pound are gaining from the dollar’s decline, with GBP/USD reaching levels not seen since September 2025. This strength is supported by solid UK economic data from late last year, but traders should be cautious as this rally largely stems from a weak dollar. Utilizing bull call spreads on EUR/USD could enable traders to profit from a continued rise toward 1.2000 while managing risk. Global trade tensions are affecting energy markets, keeping WTI crude oil prices steady around $61 a barrel. Ongoing supply concerns from transatlantic tariff disputes that emerged in late 2025 suggest this price strength may persist. Traders might consider buying futures contracts for short-term exposure or using call options to speculate on further price spikes if tensions escalate. Create your live VT Markets account and start trading now.Dividend Adjustment Notice – Jan 26 ,2026
Dear Client,
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Industrial production in Singapore missed projections, showing an 8.3% decrease instead of the expected 10.1% drop.
Eur Usd Pair and the Federal Reserve
The EUR/USD pair went up by 0.36%, nearing four-year highs because the US Dollar weakened. Traders are keeping an eye on this pair as the Federal Reserve prepares to announce its policies. The GBP/USD pair has risen above 1.3650, showing positive movement thanks to strong UK economic data. Investors are now looking at the US Durable Goods Orders report for further guidance. Bitcoin, Ethereum, and Ripple are recovering slightly, staying close to important support levels after recent drops. Their price actions suggest possible stabilization or further recovery soon. In other updates, Cardano’s price is at $0.34, but ongoing corrections may lead to more declines. A drop in Open Interest indicates that fewer market players are involved.Weakness in the US Dollar Continues
The move towards safety in the market is speeding up, making long positions in gold an easy choice. Central banks have consistently bought over 1,000 tonnes of gold in 2025, providing strong support. Traders might consider call options on gold futures or gold-backed ETFs to benefit from rising prices while managing their risk. It looks like the US Dollar will continue to weaken, especially with the Federal Reserve meeting this week. The US Consumer Price Index has missed expectations for two months straight, dropping to an annualized rate of 2.1% in December 2025, which gives the Fed room to be more cautious. A direct way to take advantage of this trend is to short the US Dollar Index (DXY) using futures contracts. On the other hand, the British Pound is gaining strength, supported by strong domestic economic data. The latest S&P Global UK Composite PMI for January was 54.1, the highest in over a year, indicating that the UK economy is doing well. We believe that buying call spreads on GBP/USD is attractive for trading this divergence. Disappointing industrial production numbers from Singapore suggest potential challenges for the wider Asian export market. This data follows last week’s Caixin Manufacturing PMI from China, which dropped back to 49.8, indicating contraction and affecting regional sentiment. Buying put options on equity ETFs focused on Asia could be a useful hedge in the weeks ahead. Volatility is increasing across different asset classes, and the Japanese Yen is gaining from both safe-haven demand and a strict central bank. With the Bank of Japan signaling a possible exit from its negative interest rate policy by March, a stronger yen seems likely. We see value in buying put options on the USD/JPY pair, aiming for a drop below 140.00. Create your live VT Markets account and start trading now.Singapore’s industrial production fell by 13.3% month-on-month, better than the predicted decline of 15.2%.
Singapore’s industrial production fell by 13.3% in December compared to the previous month, which was better than the anticipated 15.2% drop. This indicates ongoing challenges in the manufacturing sector, influenced by global supply chain issues and economic uncertainties.
The manufacturing sector is crucial for the economy, and this result hints at some resilience, although the overall trends still look concerning.
