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Scotiabank strategists say the Euro has weakened slightly against the US Dollar due to mixed data.

The Euro (EUR) has dropped by 0.1% against the US Dollar (USD), continuing its decline since last June. Recent data has been mixed; the Euro has reacted to disappointing numbers, like the Consumer Price Index (CPI), but has ignored good news, such as positive German industrial production figures. This mixed information has caused lower expectations for interest rates and weakened support for the Euro. Additionally, there is growing pressure on sentiment, evident from a decrease in demand for protection against the Euro’s strength. The European Central Bank (ECB) is providing neutral policy guidance, which gives little direction to the Euro.

Key Support Level

The 50-day moving average at 1.1651 is a crucial support level. Although it has not been significantly breached, there are growing concerns about the Euro’s continued decline, with little support expected between current levels and 1.16. The Euro remains weak against the US Dollar, reflecting the bearish trend that began in the last quarter of 2025. This weakness is due to a growing policy difference between a cautious European Central Bank and a more confident US Federal Reserve. The market seems to be focusing only on negative news from Europe while overlooking any minor positive surprises. Recent data from the end of last year has also dampened expectations for interest rates, weakening support for the Euro. The December 2025 US nonfarm payrolls report showed a strong addition of 216,000 jobs, far exceeding the weak German factory orders reported for the same month. As a result, futures markets are now predicting an ECB rate cut by the second quarter of this year, much sooner than any expected action from the Fed.

Derivatives Market Shift

In the derivatives market, there has been a noticeable shift as traders prepare for further weakness. The cost of options that protect against a decline in the Euro has increased, showing a rising demand for downside protection. This indicates that market participants are more focused on managing the risks of a drop rather than positioning for a rally in the short term. We previously identified the 1.0800 level as important near-term support. The recent drop below this level raises concerns. Although the move hasn’t been drastic, we are now more wary of a potential extension of this decline in the coming weeks. There appears to be limited support between current levels and the 1.0650 area, which was a significant low in October 2025. Create your live VT Markets account and start trading now.

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Euro weakens against the Dollar for the seventh consecutive day following mixed US employment data

The EUR/USD pair is under pressure as mixed US labor market data supports the US Dollar. The latest report shows Nonfarm Payrolls increased by 50,000 in December, which is below the expected 60,000. However, the Unemployment Rate dropped to 4.4% from 4.6%. Wage growth increased by 0.3% for the month and 3.8% year-over-year, surpassing forecasts. These data points present a mixed picture: While Nonfarm Payrolls were weak, the falling Unemployment Rate and rising wages suggest some strength in the labor market. Now, the market is looking ahead to the Federal Reserve’s actions and upcoming University of Michigan sentiment data for more clarity.

The Role Of The Federal Reserve

The Federal Reserve shapes US monetary policy and influences the strength of the US Dollar by adjusting interest rates. If inflation goes beyond their 2% target, the Fed raises rates, which helps strengthen the Dollar. If inflation drops or unemployment increases, they might lower rates, weakening the Dollar. Quantitative Easing (QE) involves the Fed increasing credit flow, often leading to a weaker Dollar. In contrast, Quantitative Tightening (QT), which reverses QE, typically strengthens the Dollar. The Fed holds eight policy meetings each year to assess the economy and determine its actions. The mixed US labor report is keeping the dollar strong and putting pressure on the EUR/USD pair. Although job creation was weaker than expected, the market is focusing on the lower unemployment rate and stronger wage growth, indicating underlying strength in the US economy that supports the Dollar. Wage growth is vital because inflation is still a concern for the Federal Reserve. For example, the Consumer Price Index (CPI) for November 2025 was at 3.1%, remaining well above the Fed’s 2% target. As long as inflation stays elevated, the Fed is unlikely to signal any major interest rate cuts. This situation contrasts with Europe, where the European Central Bank started an easing cycle in the summer of 2025 to support a struggling economy. This difference in policy, with the Fed holding steady and the ECB cutting rates, creates a fundamental reason for the Euro to weaken against the Dollar. For derivative traders, this supports strategies aimed at benefiting from a declining EUR/USD.

Trading Strategies And Key Events

Given these trends, there is rising interest in buying put options on the Euro, which would gain from further declines toward the 1.1600 level. Another strategy being considered is selling out-of-the-money call options to generate income, betting that significant upward movements in the pair are unlikely soon. These positions let traders take advantage of downward momentum while managing risk. Key events to watch in the coming weeks include the University of Michigan Consumer Sentiment survey and speeches from Fed officials. A surprisingly weak consumer report could challenge the strong dollar narrative and indicate that the Fed might need to ease policy sooner than expected. Traders should be ready for a potential short-term reversal if Fed speakers express more concern about economic growth. Similar conditions were seen in early 2025 when the market anticipated the Fed’s first moves, leading to significant volatility around key data releases. This indicates that while the overall trend may support a stronger Dollar, sharp counter-moves can happen. Using options can help manage risks associated with the expected fluctuations in the weeks ahead. Create your live VT Markets account and start trading now.

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Carsten Fritsch from Commerzbank notes a sharp decline in gold and silver prices, then a recovery

Gold and silver prices dropped sharply on Thursday. Gold neared $4,400 per ounce, and silver briefly fell below $74. However, both metals showed some recovery, reflecting short-term market uncertainty. Recently, there has been notable price volatility in gold and silver, indicating an uncertain short-term price outlook. A correction removed references to the expected US Nonfarm Payrolls data from the initial report.

EUR/USD and GBP/USD Trends

EUR/USD hit new lows, aiming for 1.1600, as the US Dollar gained strength from mixed US Nonfarm Payroll data. GBP/USD dropped below 1.3400, facing pressure from the strong US Dollar and approaching its 200-day SMA. Gold peaked around $4,500, benefiting from risk-off sentiment despite the strong dollar. Bitcoin hovered around $90,000 as institutional demand decreased, while Ethereum stayed above $3,000 but faced pressure from ETF outflows. XRP’s retail demand fell, approaching support at the 50-day EMA, with futures Open Interest dropping to $4.15 billion. The US CPI release next week could impact market movements amid geopolitical tensions. The significant price swings suggest uncertainty about the short-term outlook. The mixed US Nonfarm Payrolls report for December 2025 showed the economy added a solid 195,000 jobs but with weak wage growth, leaving markets without a clear direction. This anxiety is reflected in the CBOE Volatility Index (VIX), which has risen above 21. Precious metals are reacting to this uncertainty, with gold’s sharp dip to $4,400 followed by a rally back toward $4,500. This volatility suggests strong underlying demand during dips. Major gold ETFs have seen net inflows of over $1.5 billion in the first week of the year. This environment is ideal for options strategies that benefit from large price swings rather than a specific direction.

Market Expectations and the Fed

The market is scaling back expectations for near-term Federal Reserve rate cuts. Just last month, fed funds futures indicated a nearly 70% chance of a rate cut by March 2026; now that probability has fallen below 40%. This change has been the main driver of the US Dollar’s recent strength. As a result, the stronger dollar is putting pressure on pairs like EUR/USD, which is now looking to drop to 1.1600. Similarly, GBP/USD has dipped below 1.3400 and is challenging its critical 200-day moving average near 1.3380. Traders should carefully consider derivative positions that may benefit from further declines in these currencies in the coming days. All eyes are on next Tuesday’s US Consumer Price Index (CPI) report, which will be a major catalyst. Current market activity resembles the choppy trading seen in late 2024 when being nimble was crucial. A hotter-than-expected inflation report could accelerate the US Dollar’s rise and further harm risk assets. Create your live VT Markets account and start trading now.

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Market reactions to Tesco and Sainsbury’s recent positive updates seemed confusing during the podcast discussion.

Tesco’s market share grew to 28.7%, with a 3.9% increase in UK like-for-like sales in Q3 and 3.2% during Christmas. The company raised its full-year profit forecast to between £2.9bn and £3.1bn. Despite this positive news, Tesco’s shares dropped, approaching the crucial 200-day moving average, which could signal a trend change if prices continue to fall. Sainsbury’s shares also dropped, even after reporting a 3.9% rise in Q3 sales and a 3.3% increase over Christmas. While grocery sales were solid, the Argos division saw declines of 1% in Q3 and 2.2% during Christmas. Operating profit forecasts remained over £1bn, with cash flow expectations improving to over £550m. There is speculation about a possible spin-off of Argos.

Primark Facing Challenges

Primark’s owner, Associated British Foods, struggled with a 2.7% drop in Q1 like-for-like sales, particularly in Europe where sales declined by 5.7%. Overall, total sales grew by 1%, but profits are expected to be lower than last year. The share price is around 1,800p, showing uncertainty in the market. Despite the rising cost of living, Tesco and Sainsbury’s have managed to grow, keeping their strong positions against competitors like Aldi and Lidl. They remain key players in the UK grocery market, despite facing challenges with their share prices. It’s puzzling that Tesco and Sainsbury’s received a negative market response despite their strong updates. Tesco’s price is testing its 200-day moving average and the 407p lows from August 2025, which acts as crucial support. For traders, this offers an opportunity to sell out-of-the-money put options, betting that this support level will hold despite the bearish sentiment. In a similar vein, Sainsbury’s stock fell despite solid grocery sales, likely hurt by poor performance in Argos. The stock is finding support near its own 200-day moving average and the 300p lows from December 2025. This dip may be an overreaction, making call options appealing if you believe the grocery performance is the key and support will hold.

Economic Data Impact

Investor nerves appear to stem from broader economic data that clouds the retail outlook. Recent ONS figures showed headline inflation fell to 3.1% in December 2025, but food inflation remains high at 5.2%, putting pressure on margins. Additionally, the GfK consumer confidence index for December 2025 remained deeply negative at -21, indicating that shoppers are still cautious. On the other hand, Associated British Foods faced a decline in share price due to genuinely weak numbers, now sitting on key support around 1,800p. If the stock can remain above its 2025 lows, it might suggest that selling pressure has eased for now. The main takeaway from these movements is the rising uncertainty, often reflected in higher implied volatility. This makes options strategies like straddles attractive for traders anticipating significant price moves in either direction but unsure of the cause. It’s essential to monitor whether these major support levels hold or break, as it will affect potential rebounds in the coming weeks. Reflecting on 2025, Tesco and Sainsbury’s effectively defended their positions against discount retailers like Aldi and Lidl. Kantar market share data from late 2025 indicated their growth primarily came at the expense of competitors like Morrison’s and Asda. This historical resilience suggests that current share price weakness may not accurately reflect their long-term market strength. Create your live VT Markets account and start trading now.

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Scotiabank strategists say the Canadian dollar stays stable even as the US dollar strengthens

The Canadian Dollar is stable against a stronger US Dollar. Strong employment figures in Canada late last year initially boosted its value. This led markets to reconsider the possibility of interest rate cuts by the Bank of Canada, even with ongoing concerns about the Federal Reserve. The Canadian Dollar gained against the US Dollar as short-term interest rate spreads narrowed late last year. Recently, the US Dollar has been resistant in the upper 1.38 range. This level includes a significant retracement from the USD decline seen in November-December, a notable low from late October, and the 100-week moving average.

USD Trend Momentum

Current trends indicate that the US Dollar might stay strong. There’s potential for it to reach the 1.3950/00 range. USD support remains solid at 1.3810/20. This article has updated earlier references regarding Canadian employment data for December to ensure accuracy. The FXStreet Insights Team gathers market insights from experts, including analysis from both inside and outside the organization. The positive jobs report from Canada is backing the Canadian Dollar. Statistics Canada reported a gain of 45,000 jobs in December, prompting us to rethink how soon the Bank of Canada will cut its 4.25% policy rate. At the same time, markets are still anticipating possible easing from the US Federal Reserve after last month’s core US CPI figures came in slightly lower than expected.

Strategies for Resistance Levels

As the US Dollar tests important resistance levels in the upper 1.38 range, traders should consider strategies that could benefit if this barrier holds. One option is to buy USD/CAD put options with a strike price around 1.3850 or set up bear call spreads to collect premium. This strategy is supported by technical barriers, including the challenging 100-week moving average. However, trend momentum indicates that the USD might remain strong and rise towards the 1.3950 level. For traders expecting a breakout, buying call options with a 1.3900 strike price offers a way to capitalize on a potential USD rise. This gain could be triggered by any signs of weakness in the Canadian economy or a hawkish stance from the Fed. With the exchange rate at such a crucial point, implied volatility might be undervalued as we approach next week’s inflation reports. A long straddle strategy—buying both a call and a put at the same strike price and expiration—could be wise. This strategy allows profit from significant price changes in either direction, leveraging the current uncertainty in the market. Fundamental factors from late 2025, like narrowing Canada-US interest rate spreads and stable WTI crude oil prices around $82 a barrel, support the Canadian Dollar. These elements suggest that a significant drop in the CAD is unlikely. Thus, if the USD/CAD pair approaches 1.4000, it could be seen as an overextension, presenting a potential selling opportunity. Create your live VT Markets account and start trading now.

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Gold gains slightly after US labor data, trading near $4,490 after recovering from $4,400

Gold prices are slightly up as mixed US labor data affects market sentiment. The metal is trading around $4,490, recovering from a dip to $4,400. The US economy added 50,000 jobs, which is below the expected 60,000. The unemployment rate dropped to 4.4% from 4.6%, which was also lower than expected. The Federal Reserve is likely to keep interest rates steady in this month’s meeting, amid speculation about two rate cuts later on.

Focus On Inflation Expectations

Gold tends to benefit from lower interest rates since it does not yield any interest. The market’s attention is now on the University of Michigan’s survey of consumer sentiment and inflation expectations, as well as speeches from Federal Reserve officials. Geopolitical tensions are increasing, especially with the US extending its oversight on Venezuelan oil exports. Controversial statements from political leaders and unrest in various areas heighten caution, which boosts demand for gold. The US trade deficit has narrowed to $29.4 billion, the smallest since June 2009. Technically, gold prices are staying above the 21-day moving average, indicating a positive outlook. Key support levels are between $4,400 and $4,380, while resistance is at $4,500. A breakthrough could lead to past highs. Gold’s price tends to move inversely to US nonfarm payroll results, impacting market dynamics.

Puzzle For The Federal Reserve

The mixed US labor data from December 2025, which shows slower job growth but a lower unemployment rate, presents a challenge for the Federal Reserve. This suggests the Fed will likely remain cautious in its upcoming meeting. Their guidance will be crucial. This uncertainty creates a favorable situation for options traders to benefit from volatility using strategies like straddles or strangles. Market expectations for two rate cuts later in 2026 support a positive outlook for gold, as lower rates reduce the opportunity cost of holding the metal. Referring back to the 2023 and 2024 rate cycles, we noticed that market predictions for cuts were often more aggressive than what the Fed eventually implemented. Derivative traders might consider long-dated call options to take advantage of this easing trend but should remember that the timing of these cuts is uncertain. Geopolitical risks in Venezuela, Iran, and Asia keep demand for safe havens strong, providing a solid support for gold prices. A similar trend was seen in early 2022 during the Eastern Europe conflict when gold futures surged by over 5% in a month. Buying short-term, out-of-the-money call options can be a cost-effective way to prepare for a sudden price jump if any global tensions escalate in the coming weeks. From a technical perspective, gold is holding above the $4,387 moving average, indicating a bullish trend. The immediate hurdle is the $4,500 level; breaking above this could target the record high near $4,549. A bull call spread, like buying a $4,450 call and selling a $4,550 call, can be a risk-defined method to profit from potential price increases. The unexpectedly narrow US trade deficit, the smallest reported since 2009, may support the US dollar. A stronger dollar usually creates headwinds for gold, making the trading environment complex. Therefore, we should keep an eye on the U.S. Dollar Index (DXY); a rise above 104 could slow gold’s increase and prompt the use of put options to hedge long futures positions. Create your live VT Markets account and start trading now.

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EUR/GBP shows indecisiveness around 0.8670 due to conflicting data affecting its outlook

UK Economic Indicators and Pound Sterling

The UK has few macroeconomic updates, putting pressure on the Pound Sterling. Concerns over growth and inflation linger following a downward revision of the S&P Global Services PMI. This situation makes it hard for the Bank of England to make decisions and stabilizes the euro-pound pair. Attention is now on UK employment data, which is expected to help clarify the Bank of England’s policy direction. The central bank suggests a slow approach to easing. The EUR/GBP pair is likely to show little clear direction in the short term due to mixed economic signals. The Euro strengthened against the Japanese Yen by 0.28%, and the USD rose by 0.03%. The GBP remained unchanged, while the USD dipped by 0.01% against the Euro. The table below shows percentage changes against major currencies, highlighting the Euro as the strongest against the Yen by 0.28%. In late 2025, the EUR/GBP pair traded around 0.8670 without a clear trend, reflecting mixed economic signals. However, UK employment data released in December turned out to be bearish, showing ongoing wage pressures and shifting the outlook. This has set a clearer downward trend for the pair as we enter 2026.

The Bank of England and Currency Strategies

The Bank of England’s direction became clearer as UK wage growth remained high, ending 2025 with an annualized rate of 6.5%, much higher than the Eurozone average. This situation has led markets to postpone expectations for any rate cuts from the BoE, providing support for the Pound. Traders should note that options pricing now indicates a more hawkish BoE than expected just two months ago. In the Eurozone, inflation is falling more quickly. The latest flash estimates for December 2025 show a drop to 2.4%. This difference in inflation trends raises the likelihood that the European Central Bank will be the first to cut interest rates in the first half of this year. As a result, selling EUR/GBP rallies has become a popular strategy, with many traders seeing levels above 0.8600 as good shorting opportunities. With a clearer bearish outlook for the pair, implied volatility for EUR/GBP options has been decreasing from last year’s highs. Traders can take advantage of this by selling out-of-the-money call options or creating bear call spreads to collect premium. Look for key support levels near the 2025 low of 0.8500 as potential targets for put options in the upcoming weeks. Create your live VT Markets account and start trading now.

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During the European session, GBP trades near its weekly low of about 1.3420 against USD.

The Pound Sterling is under pressure against the US Dollar, trading around 1.3420 during the European session. The strength of the Dollar comes ahead of the US Nonfarm Payrolls data for December, which has pushed the US Dollar Index up by 0.17% to about 99.00, a four-week high.

Trading Range and Key Challenges

GBP/USD is expected to move between 1.3400 and 1.3535. While there are some upward risks, major support levels are likely to hold. The pair is weakening for the fourth day in a row, posing a challenge to the 200-day SMA. Gold prices remain high at around $4,500 as risk-off sentiment continues, despite the stronger US Dollar and rising Treasury yields. The market is reacting mixed to the recent US Nonfarm Payrolls release, affecting various currency pairs and commodity prices. Key upcoming events include US Consumer Price Index data and a possible Supreme Court decision on tariffs, which could shift market dynamics. It’s important to do thorough research before making any market moves, given the risks involved in investing. The US Dollar is gaining strength, placing significant pressure on the Pound as it trades near 1.3420. This comes after the December 2025 jobs report revealed that the US added 210,000 jobs, exceeding expectations and leading traders to push back hopes for Federal Reserve rate cuts. According to the CME FedWatch Tool, the likelihood of a rate cut by March has dropped from over 70% to just 40% in the past week.

Market Predictions and Defensive Strategies

We anticipate that the GBP/USD pair will stay in a lower range for the near future, between 1.3400 and 1.3535. Traders might think about selling volatility using option strategies like short strangles on currency futures, expecting the pair to stay within this range. The critical level to watch is the 200-day moving average around 1.3380, which could provide strong support. The key event on the calendar is next Tuesday’s US Consumer Price Index (CPI) report. Following a persistent inflation rate of 3.5% year-over-year in November 2025, another high reading could boost the Dollar and may push the Pound below the important 1.3380 level. Expect increased volatility around this data release. This divergence is further highlighted by the UK’s economic weakness, where inflation dropped to 2.5% in the latest 2025 report. This puts pressure on the Bank of England to cut rates sooner than the Fed, which could hinder the Pound. Long positions in GBP now feel particularly risky. Interestingly, despite the strong Dollar, Gold is surging toward $4,500, indicating fear in the broader market. This reflects a “risk-off” sentiment, where investors are looking for safety. This environment justifies portfolio protection, possibly through VIX call options or long positions in gold futures. The move away from risk is also seen in the crypto market, with institutional demand for Bitcoin falling and the price struggling below $90,000. The overall weakness in speculative assets supports a cautious approach, favoring the Dollar against weaker currencies like the Pound in the upcoming weeks. Create your live VT Markets account and start trading now.

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In December, Canada’s unemployment rate rose to 6.8%, exceeding expectations of 6.6%, even as employment increased.

Canada’s unemployment rate rose to 6.8% in December, higher than the expected 6.6%. This is an increase from 6.5% in November, based on data from Statistics Canada. The employment numbers for the month showed a net gain of 8.2K jobs, which was better than the predicted loss of 5K. Average hourly wages increased by 3.7% compared to last year, down slightly from 4% in November. The participation rate also improved, going up to 65.4% from 65.1%. Despite these mixed employment figures, the market showed little reaction, and the USD/CAD exchange rate remained stable.

Labour Market Expectations

The release of the labour market data came with expectations of job losses, predicting 5K layoffs against 53.6K new hires in November. The Bank of Canada (BoC) may consider cutting interest rates if signs of economic slowdown worsen, even though current rates are at 2.25%. As USD/CAD approaches 1.3871, the bullish trend is supported by the 20-day Exponential Moving Average and a 14-day Relative Strength Index of 60. The currency pair is trading near a key 50% Fibonacci retracement level. Labour market conditions can impact currency values because employment levels drive consumer spending and economic growth. Wage growth, an important measure of inflation, is closely monitored by central banks for policy decisions. Looking back at the employment report from December 2024, we noted the unemployment rate rose to 6.8%, indicating a softening labor market in Canada. This trend persisted into 2025, with the latest jobs report for December 2025 showing unemployment has climbed to 7.2%. This ongoing weakness confirms the slowdown that began last year.

Impact on Interest Rates

The persistent labor market issues have directly influenced the Bank of Canada’s policies. Unlike late 2024 when the BoC maintained its key interest rate at 2.25%, there have since been several rate cuts, reducing the rate to 1.75%. Slowing wage growth, which now stands at an annualized rate of 3.1%, gives the central bank little reason to change this approach. Amid this situation, the USD/CAD exchange rate has surpassed the 1.3900 mark discussed in early 2025 and is now hovering around 1.4150. Given the weak Canadian data and the potential for more dovish sentiment from the Bank of Canada during its January 22 meeting, traders might consider bullish strategies for this pair. Buying call options with a strike price around 1.4200 that expire in February offers a defined-risk way to profit from further Canadian dollar weakness. The market expects a cautious message from the central bank, and implied volatility for USD/CAD options is increasing ahead of the meeting. This scenario suggests that strategies like bull call spreads could be effective, helping traders lower the cost of a bullish position. In the coming weeks, we see the most likely direction for USD/CAD as upward, especially if US economic data performs better than Canada’s. Create your live VT Markets account and start trading now.

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In September, US building permits increased to 6.4%, rebounding from a decline of -3.7%

In September, building permits in the US increased by 6.4%, a positive change from the previous month’s drop of -3.7%. This indicates a recovery from earlier negative trends. Gold is gaining attention, currently priced above $4,500, and is on track for a 4% weekly rise after the US Nonfarm Payrolls (NFP) report. Even with a stronger US Dollar, gold continues to find support as the market turns risk-averse.

USD Currencies Movement

The USD/CAD pair is gaining strength due to a robust US Dollar, while the Canadian Dollar is impacted by lower oil prices. The USD/JPY remains close to its one-year highs, as markets adjust their expectations for Federal Reserve interest rate cuts. The GBP/USD has declined and is trading below 1.3400, pressured by the US Dollar. It struggles to maintain crucial support levels amid weak nonfarm payrolls. In the cryptocurrency market, Bitcoin is stable at $90,000, but is below its 50-day EMA, indicating a lack of institutional support. Ethereum is holding steady above $3,000, but is also showing weakness due to ETF outflows. XRP continues to face pressure. With strong labor data from December 2025, the market is significantly lowering the chances of a Federal Reserve rate cut in January. This shift is driving a strong rally in the US Dollar. The CME’s FedWatch Tool now shows less than a 15% chance of a cut this month, compared to nearly 50% only weeks ago.

Economic Trends and Projections

The American economy is proving to be resilient, backing the Fed’s cautious approach. The 6.4% rise in building permits from September 2025 now appears to be a sign of renewed economic activity, rather than an outlier. This contrasts with the slowdown in the housing market seen in early 2025, indicating the economy is strong enough for the Fed to keep rates steady. Gold’s rise above $4,500 per ounce highlights ongoing market fears, especially alongside a strengthening dollar. This unusual behavior suggests persistent geopolitical risks and increased purchasing by central banks, a trend that has intensified throughout 2025. Traders may consider this a hedge against risks outside the control of monetary policy. This situation is putting pressure on currencies like the Pound and the Euro. With GBP/USD below 1.3400 and EUR/USD aiming for 1.1600, bearish positions seem attractive. The upcoming US Consumer Price Index (CPI) report is crucial; another high inflation reading, like the 3.4% in December 2025, would likely support the case for no immediate rate cuts and push these currency pairs lower. The “higher for longer” interest rate outlook is also making things tough for riskier assets. This is evident in the cryptocurrency market, where institutional demand is fading. Bitcoin is finding it hard to stay above $90,000, despite a positive start to the year. Ethereum ETF outflows have exceeded $500 million since late 2025, indicating that investors are shifting away from non-yielding assets to the dollar. Create your live VT Markets account and start trading now.

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