Jobless claims in the United States decrease from 1.923 million to 1.866 million
Continuing jobless claims in the United States dropped from 1.923 million to 1.866 million as of December 19. This decrease points to possible improvements in the US labor market as the year comes to a close.
Currency changes show a shifting financial scene. The Pound Sterling weakened against the US Dollar, testing support levels near 1.3450, while the EUR/USD pair rebounded towards the 1.1750 area during year-end trading.
Initial jobless claims in the United States hit 199K, below the expected 220K
The United States reported initial jobless claims of 199,000 for the week ending December 26, which is lower than the predicted 220,000. This indicates that the job market remains strong, even with some end-of-year fluctuations.
In the currency markets, the US Dollar is in higher demand, affecting GBP/USD rates, which are around 1.3450. At the same time, EUR/USD has bounced back to the 1.1750 area as trading slows down toward the end of the year.
Gold And Its Market Position
Gold is close to $4,300 and could show monthly gains for December. It is under some pressure from profit-taking and adjustments but is likely to continue its winning streak into a fifth month. Cryptocurrencies like Bitcoin, Ethereum, and Ripple are steady, with slight gains. Bitcoin might extend these gains with a triangle pattern, while Ethereum and Ripple face resistance. Next year looks promising for advanced economies. The crypto market outlook for 2026 suggests ongoing volatility, with positive regulatory changes expected to help the sector. The latest jobless claims at 199,000 reveal a surprisingly strong labor market as the year ends. This figure is much lower than the forecast of 220,000, suggesting economic strength that could carry into the new year. This raises questions about whether the Federal Reserve will feel pressured to cut rates early in 2026.Inflation And Federal Reserve Policy
Keep in mind that core inflation from November 2025 was reported at 4.0%, significantly above the Fed’s 2% target. A tight labor market can support consumer spending, making it harder for inflation to drop as quickly as desired. This situation complicates the Federal Reserve’s ability to ease monetary policy in the first quarter. The derivatives market has priced in almost 150 basis points of rate cuts for 2026, starting as soon as March. However, strong employment data suggests these expectations may be too aggressive and might need adjustment. Traders should consider positions that can profit from a delay in rate cuts, such as selling near-term SOFR futures contracts. For equity markets, the outlook is complex. A strong economy can boost corporate earnings, but the possibility of higher interest rates for a longer time could pressure valuations. We expect this could increase market volatility, making downside protection options like VIX calls more appealing as we head into January. The US Dollar, which has seen some gains trimmed in light trading, may regain strength soon. If the market lowers its rate cut expectations, the dollar could become more attractive compared to the Euro and Pound. This suggests that call options on the US Dollar Index (DXY) could be a smart strategy for the coming year. Create your live VT Markets account and start trading now.4-week average of initial jobless claims in the United States rises to 218.75K
The United States has seen a rise in the average number of initial jobless claims over four weeks, increasing from 216.75K to 218.75K as of December 26. This change occurs as trading slows down at the end of the year, affecting various financial indicators.
Currency Market Trends
In the currency market, the Pound Sterling has weakened against the US Dollar, approaching 1.3450 during the year-end trading sessions. At the same time, the Euro has bounced back against the US Dollar, reaching around 1.1750. The US Dollar Index has also fallen below 98.30 during the holiday trading period. In the precious metals market, gold is trading close to $4,300, keeping its monthly gains despite a slight pullback. Meanwhile, in the cryptocurrency market, Bitcoin, Ethereum, and Ripple are positioned for potential gains, holding steady despite some challenges. Looking ahead, 2026 seems promising for advanced economies, with continuous positive factors that boosted growth in 2025. The cryptocurrency market is also expected to undergo changes due to regulatory updates, advancements in AI, and new asset tokenization.Market Trend Analysis
Multiple brokers have been analyzed for 2025, focusing on regions like MENA, LATAM, and Indonesia, showcasing their currency and commodity trading services. With initial jobless claims rising to 218,750, this signals a subtle but noteworthy development. While this number remains historically healthy, the upward trend indicates the strong labor market of 2025 may be losing some energy. This could lead the Federal Reserve to adjust its approach. Investors should look for options in interest rate futures that could benefit from increased volatility in the first quarter of 2026. The US Dollar Index falling below 98.30 suggests calm trading at the end of the year. However, this weakness, along with softer labor data, might signal future shifts once regular trading resumes in January. With EUR/USD rising to 1.1750, it’s wise to avoid major directional bets and consider strategies that could profit from breakouts in either direction after the holidays. Gold’s drop to the $4,300 range seems more like profit-taking rather than a trend change, particularly as it approaches its fifth consecutive positive month. Reviewing the second half of 2025, gold has performed strongly, and this pullback could offer a good entry point for long positions. Derivative traders may want to explore call options on gold in anticipation of continued strength into the new year. Create your live VT Markets account and start trading now.EUR/USD rises above 1.1750 after finding support during a quiet year-end
**EUR/USD Turning Point**
The EUR/USD currency pair has changed direction, finding support at 1.1720 and trading above 1.1750 as the U.S. session begins. The U.S. Dollar’s recovery is slowing down, and upcoming U.S. Jobless Claims are expected to impact trading during this end-of-year period.
The Euro is on track for a 14% annual gain, thanks to different monetary policies from the European Central Bank (ECB) and the Federal Reserve (Fed). Trade policies and a weakening U.S. economy have pushed the Dollar down.
Recent FOMC minutes showed mixed views among Fed officials, with a narrow approval for a 25 basis points rate cut. Future rate cuts will depend on inflation trends, leading to uncertainty. The Dollar gained strength after these minutes were released.
Jobless Claims in the U.S. will draw attention this week, although trading volumes might be lower due to market closures for New Year celebrations. Japanese markets will also remain closed for the rest of the week.
The Euro’s strength is evident against major currencies, especially the New Zealand Dollar. The Dollar Index has decreased nearly 10% this year, marking its worst performance in eight years. The rate cut by the Fed received a 9 to 3 vote, reflecting difficulties in setting monetary policy.
Future rate cuts will rely on inflation forecasts, with more cuts possible in 2026 and 2027. This week’s U.S. Jobless Claims report may show an increase in unemployment applications.
**Technical Insights**
Technical indicators suggest that EUR/USD might face resistance near the trendline at 1.1770. Higher levels could include December highs, while support is near the lows from December 17 and 19.
The Euro is the official currency of 20 EU countries and follows the U.S. Dollar in trading volume. In 2022, it made up 31% of forex transactions, with an average daily turnover of $2.2 trillion.
The Frankfurt-based ECB influences the Euro through interest rate changes and monetary policy. Inflation and economic data from the Eurozone are crucial for determining the Euro’s value.
Trade balance figures also affect the Euro’s performance. Financial news editor and copywriter Guillermo Alcala notes that this information is not investment advice and should be used with caution.
As 2025 ends, EUR/USD is around 1.0850. Trading should be quiet as January approaches, which can sometimes trigger sudden movements in low-volume conditions. This situation is reminiscent of past year-end periods.
This mirrors market conditions from the end of 2020 when the pair traded above 1.1700 due to a policy divergence between a dovish Fed and the ECB. The situation has reversed, resulting in a stronger dollar. Now, we need to monitor if this policy gap is closing again.
**Market Outlook**
Recent data indicates that U.S. core inflation has cooled to 2.5% year-over-year, while Eurozone inflation is slightly lower at 2.2%, tightening the gap that has favored the dollar. With the Federal Reserve hinting at a possible pause in policy for 2026, the volatility expectations for the first quarter may be underestimated. Options traders could consider taking positions that could benefit from a breakout from the current narrow trading range.
We will closely watch the upcoming U.S. Initial Jobless Claims figures, which have remained strong. The latest reading for the week ending December 27, 2025, was at 210,000. A surprising spike in claims could boost expectations for a Fed rate cut, potentially pushing EUR/USD higher. Any movement toward the 1.0900 level will be a key resistance point to observe.
While past analysis pointed to resistance near 1.1770, the new key level to monitor in early 2026 is around the 1.0950-1.1000 psychological barrier. For those with long-dollar positions, buying euro call options with a strike price around 1.1000 may provide a cost-effective hedge against a potential sharp decline in the dollar during the first quarter. This strategy protects existing positions while allowing for participation in a euro rally.
**Create your live VT Markets account and start trading now.**
US Dollar Index (DXY) drops below 98.30 in a calm holiday trading session.
The US Dollar Index (DXY) saw a small rise during a calm year-end session. It hit a peak of 98.44 before settling around 98.25 at the start of the US trading day. Right now, the DXY is about 2% lower than its November high of 100.40 and is on track for an almost 10% drop for the year, making it the worst performance in eight years.
Worries about US trade policies and an economic slowdown have increased short positions on the US Dollar. Political pressure on the Federal Reserve has raised concerns about its independence, which leads to questions about the Dollar’s status as a global reserve currency. The Federal Reserve is currently easing its monetary policy while other central banks are keeping their rates steady. This situation is likely to put continued pressure on the Dollar.
Impact Of US Jobless Claims
As the year wraps up, trading volumes are low, but the US weekly Jobless Claims report might still affect the foreign exchange market. Applications for unemployment benefits are expected to rise to 220K from 214K, which could negatively impact the USD. The US Dollar is the most traded currency globally, accounting for 88% of foreign exchange activity, around $6.6 trillion a day. Its value mainly relies on the Federal Reserve’s monetary policy, including interest rate changes and strategies like quantitative easing or tightening. We anticipate that the US Dollar will continue to face challenges as we move into 2026. The Federal Reserve has already cut rates three times in 2025, while other central banks, like the ECB, have kept rates unchanged for six months. This difference makes the Dollar less appealing to investors seeking higher yields. Signs of an economic slowdown are becoming clearer. The final third-quarter GDP for 2025 was revised down to a weak 0.8% annual growth. With November’s inflation dropping to 2.3%, we believe the Fed has room for further rate cuts, maintaining a bearish outlook. For those trading derivatives, this might mean looking into put options on the DXY or selling futures contracts in the coming months. The latest jobless claims data showed a worse-than-expected outcome, with 225,000 claims for the last full week of December, reinforcing a negative view on the Dollar. Historically, a weakening labor market has often preceded more Fed easing, as we saw before the recessions in 2001 and 2008. This suggests that any short-term strength in the Dollar during the quiet holiday season could present a chance to take bearish positions.Effect Of Trade Policy And Political Pressure
Concerns about trade policy and political pressure on the Federal Reserve are also crucial factors to consider. Such uncertainty often leads to increased volatility, making options strategies like straddles or strangles potentially useful for traders expecting larger price fluctuations in early 2026. This environment undermines confidence and could keep putting downward pressure on the Dollar’s value. Create your live VT Markets account and start trading now.South Africa’s trade balance increased from 15.58 billion to 37.7 billion Rands in November.
The South African trade balance increased from a surplus of 15.58 billion rands to 37.7 billion rands in November. This shows an improvement in the country’s trade situation.
This change may reflect better export performance or lower imports. Overall, it paints a more positive economic picture for South Africa.
With the November 2025 trade surplus at R37.7 billion, we expect near-term strength in the South African Rand. This amount exceeds expectations, indicating a strong inflow of foreign currency. It may lead to a decline in currency pairs like USD/ZAR in the coming weeks.
This surplus is one of the biggest we’ve seen in years, especially compared to the smaller surpluses of R10 to R20 billion that were typical in late 2023. Such a significant increase points to strong export performance, likely influenced by commodity prices, which boost demand for the local currency. We can use this good news to design trades that take advantage of a stronger ZAR.
One simple strategy is to buy put options on the USD/ZAR pair, set to expire in late January or February 2026. This lets us profit from a possible drop in the exchange rate while clearly defining our maximum risk. We should act before the market fully reacts to this unexpectedly strong data.
However, we need to watch how the South African Reserve Bank responds. A stronger Rand can help reduce inflation, which led the bank to raise its repo rate to 8.25% in the 2023-2024 period. If this news makes the market expect earlier interest rate cuts in 2026, it could limit how much the Rand can grow.
The strength of the ZAR also depends on whether this trade surplus comes from temporarily high commodity prices or a more permanent change. We need to look closely at the underlying details to determine if the surge is due to a sustainable rise in exports or a drop in imports, which might indicate weaker domestic demand. A rally fueled by fluctuating commodity prices could reverse quickly if global sentiment changes.
Pound Sterling strengthens in European trading while testing support at 1.3450 against major currencies
The Pound Sterling is gaining against major currencies on the last day of 2025. The rise in the British currency is due to expectations that the Bank of England will cut rates less than other central banks.
GBP/USD is steady for the second day, staying around 1.3460 during Asian trading hours on Wednesday. Technical analysis reveals that the pair is slightly below the lower edge of an upward trend channel, hinting at weakness in its bullish trend.
Year-End Trading Patterns
As 2025 wraps up, the Pound is dropping against the US Dollar, testing the 1.3450 support level and falling below the nine-day EMA. In related movements, EUR/USD has bounced back from recent lows in quieter trading, and the US Dollar Index has seen reduced gains in the calm holiday markets. The GBP/USD faces hurdles as it tests these support levels. At the same time, other important currency pairs are adjusting in year-end trading conditions. With the Pound challenging the 1.3450 support, we may see some short-term weakness as we approach the new year. The drop below the nine-day moving average is a technical sign that could draw sellers in the first full trading week. This indicates a cautious approach is advisable for the immediate future. However, the overall outlook remains positive, as there is a belief that the Bank of England will be slower to cut interest rates than other central banks in 2026. This difference in monetary policy should support the Pound during any significant downturns. The market’s expectations that rate differences will favor the Pound are crucial here.Inflation’s Impact on Monetary Policy
This perspective is backed by recent data from late 2025, which shows UK inflation staying high. The November 2025 CPI report displayed inflation at 3.1%, well above the BoE’s 2% target, explaining their reluctance to signal rate cuts from the current 4.75%. In contrast, the US Core PCE index dropped to 2.4% in its last report, providing the Federal Reserve with more reasons to loosen policy. Given this clash between short-term technical signals and long-term fundamentals, traders might look into buying put options expiring in January 2026 to protect against further drops below 1.3450. Alternatively, this dip might also be a chance to establish longer-term bullish positions, like buying call options for March or April 2026. This could help traders ignore any immediate noise from holiday-thinned markets. Additionally, we should consider the low liquidity typical of year-end, which can worsen price fluctuations. We remember a similar trend at the start of 2024 when a brief technical decline was quickly reversed as institutional investors returned. The current low implied volatility makes option strategies like straddles appealing for capitalizing on potential price spikes once trading volume picks up in January. Create your live VT Markets account and start trading now.Amid slow holiday trading, the Yen struggles as EUR/JPY approaches 184.00
The Japanese Yen is struggling in holiday trading, with EUR/JPY close to 184.00 after bouncing back from around 183.50. This pair is near its long-term high of 185.00, reached earlier this month, and is set to finish the year with a gain of over 14%.
In 2025, the Yen has weakened due to the Bank of Japan’s careful monetary policy and worries about tariffs affecting Japan’s export-driven economy. The recent BoJ meeting reinforced plans for gradually tightening monetary policy, but there may be resistance from the government against fast changes.
European Economic Outlook
In Europe, the European Central Bank suggests the end of its monetary easing phase, hinting at a possible rate increase next year, which has strengthened the Euro. The Yen’s value depends on Japan’s economy, BoJ policies, bond yield differences, and how traders feel about risks, making it an important global currency. The BoJ often tries to control the Yen by intervening in the market to lower its value, but it does so cautiously and politically. Historically, the Yen was devalued because of the BoJ’s differing policies. However, as these policies change, the Yen has gained some support. It tends to rise during market stress since it is seen as a safe haven, attracting investment when markets are turbulent. As the Yen is the weakest major currency in 2025, traders should expect continued EUR/JPY strength into the new year. The pair has finished the year up over 14%, and as thin holiday trading ends, we could see it approach the resistance level of 185.00. This trend is supported by a clear gap between the policies of the European Central Bank and the Bank of Japan. The Bank of Japan appears reluctant to significantly tighten its monetary policy, despite ending its ultra-loose stance earlier in 2025. Japan’s core inflation for November 2025 was 2.5%, a level that calls for caution rather than swift rate hikes from the bank. Meeting summaries from the BoJ confirm a slow and cautious approach, providing little support for the Yen.ECB Policy Stance
Meanwhile, the European Central Bank is signaling an end to its rate cutting, especially after recent data showed Eurozone inflation rising to 2.8% in November 2025. This has shifted expectations in the market, with a possible rate hike now considered for the second half of 2026. This more aggressive stance gives a strong reason for continued Euro strength against the Yen. For traders, this environment makes strategies that benefit from a rising EUR/JPY pair appealing. Buying call options can allow participation in potential gains above 185.00 while managing downside risk. The large interest rate difference, with the ECB’s main rate at 4.25% versus the BoJ’s 0.1%, also favors carry trade strategies. However, it’s important to remember the Yen’s safe-haven status, which has been less apparent in 2025. During the 2008 financial crisis, we saw the sudden reversal of carry trades. Any unexpected global market stress in early 2026 could trigger a rush to safety, strengthening the Yen. Thus, traders should consider using options to protect against a sudden market shift. Create your live VT Markets account and start trading now.Bitwise submits eleven cryptocurrency ETFs to the SEC, targeting various altcoins for investment
Bitwise has submitted applications for 11 crypto Exchange Traded Funds (ETFs) to the US Securities and Exchange Commission. These ETFs aim to provide exposure to altcoins like Aave, Zcash, and Ethena. Although institutional interest is shifting toward altcoins, Bitcoin holds a market dominance of about 60%, suggesting that an altcoin season may not be on the horizon.
Pi Network (PI) is experiencing a slow but steady increase, gaining nearly 1% at the time of writing, following a 0.40% rise the previous day. This reflects growing social interest in Pi Network, and technical analysis hints at a possible price rebound supported by a Morning Star pattern.
Mid-week, Bitcoin, Ethereum, and Ripple are maintaining stability, showing small gains from the previous day. Technically, Bitcoin might extend its upward trend within a triangle pattern, while Ethereum and Ripple are facing significant resistance above current price levels.
The recent Bitwise ETF filings reveal clear institutional interest in altcoins such as Aave and Ethena. However, with Bitcoin’s dominance around 60%, a full altcoin season isn’t assured. This creates a classic tension at the start of the year, balancing institutional flows against the market’s existing structure.
As we approach the end of 2025, the market is experiencing a typical year-end slowdown, leading to lower implied volatility across the board. Historically, periods of low volatility, like what we saw in the fourth quarter of 2023 prior to the spot ETF approvals, are often followed by sharp increases. Using buy strategies like straddles or strangles on Bitcoin and Ethereum could be an efficient way to prepare for a potential breakout in early 2026.
Bitcoin’s 60% dominance remains a key level to watch as we enter the first quarter. Data from crypto analytics firm Kaiko shows that open interest for January Bitcoin options is already at a record $15 billion. This suggests traders expect a major market move. A sustained drop below this dominance level could lead to significant fund rotation, making long altcoin baskets with a short Bitcoin hedge an appealing strategy.
While institutional focus is on potential ETF candidates, we also need to acknowledge the rising social interest around assets like Pi Network. This increase in retail enthusiasm, shown by a 25% rise in social media mentions over the past month according to Santiment data, indicates that high-risk, narrative-driven trades are still active. Engaging in small, speculative positions in perpetual futures for these coins could lead to substantial returns if retail momentum continues.
India’s infrastructure output increased to 1.8% year-on-year in November, a rise from 0% previously.
In November 2025, India’s infrastructure output grew by 1.8% compared to 0% from the previous year. This is a significant improvement after a period of little change.
At the same time, the EUR/USD pair recovered to around 1.1750 as the year ended, although trading was quiet. The GBP/USD hovered near 1.3450, facing some pressure from a strengthening US Dollar as the year wrapped up.
