Gold Pricing Methodology

Gold prices in Malaysia stayed steady on Wednesday, according to FXStreet. The cost was 586.75 Malaysian Ringgits (MYR) per gram, showing little change from the day before. For larger quantities, gold was priced at 5,867.51 MYR for 10 grams and 6,843.75 MYR per tola. The price per troy ounce was noted at 18,249.98 MYR. FXStreet calculates these prices by converting international costs (USD) into the local MYR and updates them daily. The figures reflect market rates at the time of publication. Gold has always been a reliable store of value and a means of exchange. People often view it as a safe asset during uncertain times, using it to protect against inflation and currency decline. Central banks are the largest owners, adding 1,136 tonnes of gold, worth around $70 billion, to their reserves in 2022. The price of gold often moves opposite to the US Dollar and US Treasuries, rising when the Dollar weakens. Key factors influencing gold prices include geopolitical tensions and fears of recession. Gold usually increases in value when interest rates are low, while a strong Dollar tends to limit its price rise.

Gold’s Future Potential

As gold prices hold steady on this calm Christmas Eve in 2025, the market is stabilizing after a recent drop from record highs. Low trading activity during the holidays can create a peaceful environment, but current conditions suggest readiness for a potential price rise in the new year. Traders should see this stability as a chance to prepare for upcoming movements in the next few weeks. The main factor driving prices remains the weakening US Dollar, a trend that has picked up speed throughout 2025. This shift is driven by expectations of interest rate cuts from the US Federal Reserve in the first quarter of 2026, a move anticipated since the Fed’s more relaxed approach began in late 2023. Lower interest rates make non-yielding gold more appealing. There is consistent buying from central banks, especially in emerging markets, creating strong support for prices. This trend has continued since the significant purchases made in 2022 and 2023. The World Gold Council reported that central banks added over 800 tonnes to global reserves in 2024 alone. This accumulation highlights gold’s importance as a reserve asset in a changing global economy. Ongoing geopolitical tensions and concerns about a global economic slowdown in 2026 are increasing gold’s attractiveness as a safe-haven asset. The International Monetary Fund’s latest outlook, released in October 2025, lowered global growth forecasts due to ongoing inflation and tighter credit conditions. This uncertainty makes investors wary, pushing them toward the safety of gold. For derivative traders, this environment supports a bullish outlook, but caution is advised after a recent peak. Purchasing call options for February or March 2026 could be a smart strategy to benefit from potential price increases while managing risk. We also recommend keeping an eye on gold volatility indices, which are currently low but may rise as trading picks up in January. The recent decline from the all-time high near $4,525 per ounce provides an important technical perspective. If prices decisively break above this level, it could signal a continuation of the upward trend, likely resulting in increased buying. We suggest watching the $4,400 level as a key support area in the coming weeks. Create your live VT Markets account and start trading now.

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EUR/USD is currently strong, trading at about 1.1790 after hitting a three-month high of 1.1808. The 14-day Relative Strength Index (RSI) stands at 71, suggesting it may be overbought, which could limit further gains. The nine-day Exponential Moving Average (EMA) has crossed above the 50-day EMA, indicating a bullish trend. If the pair breaks the resistance at 1.1800, it may reach targets of 1.1880 and 1.1918, the highest levels seen since June 2021.

Immediate Support

Immediate support is at the nine-day EMA of 1.1745. If this level fails, the 50-day EMA around 1.1660 could be tested, which may lead to a drop to the three-week low of 1.1589 seen earlier. The pair is moving within an ascending channel, and the market outlook is positive as the long-term EMA rises. However, momentum indicators suggest that a consolidation phase may happen before the trend continues. This analysis uses AI for technical insights and is for informational purposes only, not trading advice.

Trading Considerations

EUR/USD is testing a three-month high around 1.1808, presenting a key decision point. While the upward trend in its channel is robust, the RSI at 71 suggests it may be overbought, indicating a possible pause or pullback. This situation reflects uncertainty about central bank policies as we move toward 2026. After the Federal Reserve kept rates steady in their December 17 meeting, US inflation data for November showed a rate of 2.5%, justifying their cautious approach. Meanwhile, Eurozone inflation is slightly higher at 2.8%, leading the European Central Bank to be slower in signaling rate cuts, which supports the Euro’s strength. For those expecting the bullish trend to continue, buying call options with strike prices above 1.1810 could be a good tactic. This enables us to potentially benefit from a rise toward the channel’s upper boundary around 1.1880 while limiting our risk. Options expiring in late January or February 2026 would allow time for the trade to develop after the holiday season. On the flip side, due to the overbought RSI and key resistance at 1.1800, it’s wise to consider a pullback risk. Buying put options with strikes near 1.1750 could profit from a move toward key support at the 50-day EMA around 1.1660. This strategy acts as a hedge or a speculative bet on short-term weakness. It’s important to note that trading volumes are usually low between Christmas and New Year’s, which can lead to significant price movements on minimal news. Historically, the post-holiday period, such as early 2024, saw increased volatility as institutional traders returned. A current consolidation might be setting the stage for a more significant move in January. Create your live VT Markets account and start trading now.

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EUR/JPY has dropped to about 183.60 as the Yen strengthens due to Japan’s intervention threats. The Bank of Japan (BoJ) did not announce any plans for further monetary tightening in its recent policy update. During the Asian trading session on Wednesday, EUR/JPY fell by 0.27% to nearly 183.60. The Yen gained strength after Japan’s Finance Minister, Satsuki Katayama, warned of possible intervention against excessive Yen fluctuations.

Japan’s Potential Intervention

Katayama mentioned that Japan could intervene against extreme Yen changes. The holiday season around Christmas and New Year is considered a good time for intervention because of lower market activity. After the BoJ raised rates by 25 basis points to 0.75%, the Yen faced selling pressure. The lack of clear guidance from the BoJ about future rate hikes added to this pressure. The Euro is struggling in the Asian session, with expected low market activity ahead of the holidays. The European Central Bank (ECB) sees no urgent need for changes in monetary policy, expecting inflation to remain close to its 2% target. The Yen’s value is affected by Japan’s economic conditions and BoJ policies. It acts as a safe-haven asset, strengthening during market turmoil, even with political concerns about the BoJ’s interventions. The BoJ’s gradual move away from ultra-loose monetary policy is supporting the Yen.

Preparing for Yen Intervention

With Japan’s finance minister suggesting intervention, be ready for a quick and strong Yen strengthening. The low liquidity between Christmas and New Year makes this time ideal for officials to make impactful moves with less pushback. This suggests we should consider positions that profit from a decline in pairs like EUR/JPY. The market is already anticipating a significant move, with one-week implied volatility on EUR/JPY recently jumping above 12%, the highest it’s been in months. Buying options, like puts on EUR/JPY, could be a wise way to prepare for a sudden drop while managing risk. This method allows us to benefit from the expected increase in volatility if intervention happens. We saw a similar scenario in spring 2024 when the Ministry of Finance intervened as USD/JPY crossed 160, spending about ¥9.79 trillion to support the Yen. With EUR/JPY now trading much higher, officials’ warnings hold more weight. Past actions indicate they are serious when the currency moves too quickly. On the other hand, the Euro is not showing much strength. The ECB has indicated it will hold steady, with inflation expectations stable around their 2% target. This lack of upward momentum from the Euro makes the EUR/JPY pair especially vulnerable to a Yen-induced drop. The interest rate gap between the ECB and the BoJ, which has driven a long rise in this pair, now poses a significant risk. An intervention could erase months of gains in carry trades in just hours. Thus, we should view the current threats as a strong signal to reduce or hedge long EUR/JPY positions. Create your live VT Markets account and start trading now.

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US Dollar Index Decline Signals

The US Dollar Index (DXY) has fallen for the third day in a row, hitting its lowest level since early October at about 97.80 during the Asian session on Wednesday. It has dropped over 0.10% today, with further declines expected as the US Federal Reserve (Fed) may adopt more dovish policies. Although US economic growth rose to an annualized rate of 4.3% for July–September, up from 3.8% in the previous quarter, market sentiment is focused on possible Fed rate cuts in 2026. This is due to softer inflation and a cooling job market. President Donald Trump’s insistence that any future Fed Chair should lower interest rates, even in a strong economy, adds to the uncertainty. Current market data shows the USD performing poorly against major currencies this week. The US Dollar has decreased by 0.64% against the Euro, 1.02% against the Pound, and 1.77% against the Australian Dollar. A summary heat map illustrates the complex trading environment influenced by various economic factors. Traders are awaiting US Weekly Initial Jobless Claims data for further insights. The US Dollar Index has fallen below the key 98.00 level, indicating that the bearish trend may continue into the new year. For traders, this weakness suggests opening short positions on the dollar, such as buying put options on the DXY or futures contracts linked to the index. The market is pricing in potential rate cuts, with CME’s FedWatch Tool indicating over an 80% chance of a cut by the end of Q1 2026. This comes despite strong Q3 2025 GDP growth at 4.3%, as recent inflation data shows cooling, with the latest Core PCE reading dropping to 2.9%. This gives the Fed justification to ease its policies, even with robust growth figures.

Labor Market Trends and Fed Policies

Additionally, the labor market is showing signs of slowing, a crucial concern for the Fed. The latest Non-Farm Payrolls report for November 2025 revealed a moderation in job creation to 155,000, with continuing jobless claims increasing gradually over the past two months. This trend supports a more dovish Fed stance, making long dollar positions less appealing. Political pressure for a Fed Chair who promotes lower interest rates adds another layer of downward pressure on the dollar. This uncertainty surrounding the Fed’s independence reinforces market expectations for a prolonged period of easier monetary policy, which complicates the case for a stronger dollar. When examining currency pairs, the US Dollar is struggling the most against commodity-linked currencies like the Australian and New Zealand dollars. Traders might consider buying call options on AUD/USD or NZD/USD to take advantage of this trend. These currencies often gain when the market anticipates lower US interest rates. Historically, we have seen similar situations in 2019 when the Fed shifted from raising to cutting rates, leading to a significant decline in the dollar index over several quarters. Current conditions suggest we may be witnessing a similar pattern as we approach 2026, indicating that the current dollar weakness could mark the start of a longer-term decline. However, caution is advised due to the holiday season when market liquidity tends to be low, potentially causing unusual price movements with little news. To manage risk until trading volumes normalize in January, smaller position sizes or defined-risk option spreads are recommended. Create your live VT Markets account and start trading now.

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USD/CAD dropped to a five-month low of 1.3675 on Wednesday, as the US Dollar weakened. This change is due to expectations of two Federal Reserve rate cuts in 2026. Meanwhile, Canada’s economy showed improvement, growing 0.1% in November after a 0.3% decline in October. The USD/CAD decline continued for a third straight session, facing pressure during Asian trading hours. Calls for lower borrowing costs added to the dovish sentiment, despite the rapid US economic growth in the third quarter.

Federal Reserve Interest Rate Overview

Recent White House comments indicate that the Federal Reserve is not reducing interest rates quickly enough. Early US GDP data revealed a growth of 4.3% in the third quarter, higher than the expected 3.3%. The US core PCE Price Index rose by 2.9%, and the GDP Price Index went up by 3.7%, exceeding predictions. Analysts warn that strong GDP figures might not indicate overall economic health since this growth was mostly driven by healthcare spending and inventory reductions. Canada’s GDP estimate showed a slight 0.1% increase in November, easing concerns about growth. The Bank of Canada kept the overnight rate at 2.25%, indicating a pause in cuts, which supports the Canadian Dollar. With USD/CAD falling below the key level of 1.3700, the trend appears to favor a stronger Canadian dollar heading into early 2026. The market is increasingly considering a divergence in policies, with the Federal Reserve likely to cut rates while the Bank of Canada stays firm. In this context, selling rallies in the US dollar seems to be the preferred strategy.

Outlook for USD/CAD and Trading Strategies

We think the market is right to look beyond the strong US Q3 GDP figure and focus on potential future weaknesses. The cooling labor market in the US, with job openings dropping below 9 million for the first time in over a year at the end of 2025, supports the idea that the Fed may ease its policies. This narrative is strong enough to overshadow the headline growth numbers, which rely on less sustainable elements. On the flip side, the Canadian economy is displaying resilience, avoiding a technical recession with its modest growth in November. Coupled with stable oil prices, particularly Western Texas Intermediate, which has remained above $75 a barrel during the fourth quarter, the outlook for the Canadian dollar appears strong. The Bank of Canada’s current rate of 2.25% now looks appealing. For derivative traders, this outlook suggests that buying USD/CAD put options is a smart strategy to bet on further declines. We recommend looking at options expiring in the first quarter of 2026, aiming for strikes around the 1.3550 mark. This approach offers a defined-risk method to profit if the US dollar continues to weaken against the Canadian dollar. Given the low trading volume during the holiday season, caution is warranted regarding sudden price swings. A more conservative strategy could be a bear put spread, where you buy a higher-strike put and sell a lower-strike one. This limits your initial costs and potential profits while protecting against abrupt market reversals. Looking ahead, we need to closely watch the upcoming US employment and inflation reports in January. If these figures point to a continued slowdown in the US economy, it will strengthen expectations for Fed rate cuts and probably push USD/CAD lower. Any signs of persistent inflation in Canada would further support our outlook. Create your live VT Markets account and start trading now.

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The Japan Corporate Service Price Index held steady at 2.7% year-on-year in November, showing that corporate service costs are stable despite changing economic conditions. This steady figure suggests businesses are managing their pricing well amid market fluctuations. In other financial news, the silver price forecast predicts that XAG/USD will continue its upward trend, approaching $72.70, supported by ongoing dovish expectations from the FED. The Japanese yen remains strong against a weak USD, due to differing policies between the BOJ and the FED.

Currency Movements

The GBP/JPY stayed near weekly lows in the mid-210.00s, reflecting the overall strength of the yen. The USD/INR saw a slight rise as foreign institutional investors reduced their holdings in the Indian stock market. The Australian dollar reached a new 14-month high as the US dollar’s recovery lost momentum. Meanwhile, AUD/JPY fell to 104.50 after hitting a 17-month high. Gold prices continued to rise near $4,500, driven by demand for safe-haven assets amid geopolitical tensions. Bitcoin, Ethereum, and Ripple struggled as they encountered significant resistance, while Dogecoin also fell, affected by low open interest and funding rates, leading to a cautious sentiment across the cryptocurrency market. The stability of Japan’s Corporate Service Price Index at 2.7% indicates firm underlying inflation. This gives the Bank of Japan (BoJ) the green light to continue its policy adjustments into the new year. This steady inflation, while not too high, offers a clear path for the central bank. In contrast, inflation in the United States has cooled, with November 2025 CPI figures dropping to 2.5% year-over-year. As a result, the Federal Reserve is now expected to start easing policies, with futures pricing in a 75% chance of a rate cut by March 2026. This growing difference in policies is a key factor driving currency markets.

Implications for Traders

For traders in derivatives, this suggests ongoing strength for the Japanese Yen against the US Dollar. We should consider buying puts on USD/JPY or setting up bearish put spreads to benefit from a potential drop to the 125.00 level in the first quarter of 2026. Implied volatility for USD/JPY options has already increased by over 15% in the last quarter, and we expect this trend to continue. A similar situation occurred in spring 2024 when the BoJ ended its negative interest rate policy, leading to a significant rally in the yen. Data from that time show sharp declines in currency pairs like AUD/JPY and GBP/JPY as traders unwound speculative positions. The current market feels reminiscent of that period, but with greater momentum. The unwinding of the yen carry trade is likely to accelerate, putting pressure on currency pairs. The recent decline of AUD/JPY from its 17-month high near 104.50 is a warning for those still betting on higher-yielding currencies against the yen. We expect that options strategies that benefit from increased volatility, such as long straddles on these pairs, could be effective. A generally weaker dollar is also boosting commodity prices and other major currencies. Gold’s rise to near $4,500 per ounce is driven by this trend and ongoing geopolitical risks. The strength in EUR/USD above 1.1800 and GBP/USD above 1.3500 indicates that the dollar is likely to keep declining. However, as we enter the holiday period with thinner trading, we must watch for any changes in rhetoric. The BoJ’s first meeting of 2026 in late January will be crucial and could either reinforce this trend or reverse it if policymakers appear more cautious than expected. Any unexpected strength in upcoming US economic data could also temporarily halt the dollar’s decline. Create your live VT Markets account and start trading now.

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On Wednesday, the People’s Bank of China set the USD/CNY reference rate at 7.0471, down from 7.0523. This rate is also different from the Reuters estimate of 7.0240. The People’s Bank of China’s main goals are to keep prices stable, boost economic growth, and implement financial reforms. As a state-owned entity, the bank is strongly influenced by the Chinese Communist Party.

China’s Monetary Tools

China’s central bank uses various monetary tools, including a seven-day Reverse Repo Rate and a Medium-term Lending Facility. The Loan Prime Rate affects loan and mortgage rates and also has an impact on the exchange rates of the Chinese Renminbi. In China’s financial sector, there are 19 private banks, though it remains mainly state-controlled. Major digital lenders like WeBank and MYbank, backed by tech companies Tencent and Ant Group, have been part of this sector since 2014, when private lenders were allowed to operate. The People’s Bank of China has recently guided the yuan to be stronger against the dollar through its reference rate. This suggests a desire for currency stability or even appreciation as the new year approaches. Policymakers are clearly signaling their preferences. Recent economic data supports this move. For example, China’s industrial output for November 2025 increased by 4.8% compared to the previous year, which was better than expected. Additionally, the trade surplus rose to over $85 billion. These factors support a stronger currency.

Trading and Economic Strategies

We’ve seen similar strategies in the past, but the current situation is different from the yuan’s previous weakness in 2023 when the USD/CNY exceeded 7.30. Instead of a defensive approach, today’s stronger fix indicates a confident stance aimed at managing market sentiment, suggesting the central bank is not worried about export competitiveness right now. For traders in derivatives, betting on a weaker yuan could be risky in the coming weeks. Considering the potential for further strength in the yuan, buying put options on USD/CNY with early 2026 expirations could be a smart move. This strategy lets you take on limited risk while benefiting from potential decreases in the currency pair. The firm guidance from the central bank is likely to reduce market volatility, making it less likely for the USD/CNY to rise significantly. Thus, selling out-of-the-money call options on USD/CNY could be a smart way to earn premiums. This is also a good time for businesses to protect themselves against dollar-denominated liabilities for the first quarter. Create your live VT Markets account and start trading now.

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Silver keeps rising, marking new highs for the fourth day in a row. It’s currently trading just below $72.00, up 0.50% today. The breakout from an upward trend suggests more gains ahead, buoyed by moving averages and a positive MACD. However, the RSI is at 82, showing it’s overbought. This could slow down short-term gains. It might be smart to wait for a price drop or a pause in trading before making new bullish moves with XAG/USD. Moving averages suggest a “buy-the-dip” strategy, keeping the bullish trend as long as the breakout holds. Historically, silver serves as a reliable store of value and a hedge against inflation, traded physically or through ETFs. Its price is affected by global events, interest rates, and the strength of the US Dollar. Industrial demand, especially from electronics and solar sectors, significantly influences its price. Key economies, including the US, China, and India, are also major players. Silver’s price movement often follows that of gold due to their safe-haven status. The Gold/Silver ratio helps investors gauge silver’s relative value, influencing strategies based on whether it’s seen as under or overvalued compared to gold. As silver pushes higher, we see its strong uptrend break out of its recent channel. However, with the RSI over 80, the market is extremely overbought. While momentum is high, caution is needed at the $72 level. For those wanting to trade this bullish trend, waiting for a drop or consolidation is wise. A pullback to the previous resistance turned support around $71.24 could provide a better entry point. This buy-the-dip approach aligns with the strength of rising moving averages. This rally benefits from a positive economic backdrop, as the Federal Reserve cut interest rates for the first time in November 2025. This move has helped reduce the U.S. Dollar Index (DXY) to 98.5, a level not seen since early 2023. A weaker dollar typically supports higher silver prices. Strong industrial demand has supported prices throughout the year. Global solar panel installations for 2025 are on track to surpass 600 gigawatts, almost a 20% increase from 2024. This boom in green technology is consuming a lot of physical silver. In the second half of 2025, silver has outperformed gold. The gold-to-silver ratio has dropped from over 85 in spring to below 65 today, indicating that traders believe silver has more potential. If a correction occurs, we should watch if prices can hold above the $71.24 breakout level. If it dips below that, we may see a deeper pullback, with significant support near $67.43. This scenario could create new short-term opportunities for traders.

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WTI is currently trading positively for the fourth consecutive day, hovering around $58.50 in early Asian trading. Geopolitical concerns, particularly the US targeting Venezuelan oil operations, are influencing WTI prices. The US is intercepting Venezuelan oil tankers, which affects oil flow and leads to price increases. President Trump has proposed selling the seized Venezuelan oil to benefit the US.

US Crude Inventories

US crude inventories unexpectedly increased by 2.4 million barrels, indicating a possible drop in demand. The previous week saw a significant decrease of 9.3 million barrels, according to API data. The upcoming EIA report could impact WTI prices based on inventory levels. Larger-than-expected inventory draws may signal stronger demand, pushing prices higher, while increased supply may have the opposite effect. WTI Oil is a well-known crude oil type, recognized for being light and sweet, and it comes from the US. It serves as a key benchmark in the oil market, with prices frequently reported in the media. WTI Oil prices shift based on supply and demand dynamics, geopolitical stability, and OPEC’s production decisions. The value of the US Dollar also affects oil prices globally, as oil trades mainly in USD.

Weekly Inventory Data and OPEC Influences

Weekly inventory data from API and EIA directly influences WTI prices by showing changes in supply and demand. API reports on Tuesdays, while EIA releases data on Wednesdays, with EIA being regarded as more reliable. OPEC’s production decisions during biannual meetings significantly impact oil prices, especially as OPEC+ includes other countries like Russia. Currently, WTI crude prices are steady at around $82 a barrel this Christmas Eve. This stability is mainly due to renewed geopolitical tensions in the Strait of Hormuz, which is adding a risk premium to prices. This scenario is similar to the disputes between the US and Venezuela that we observed in the early 2020s. The CBOE Crude Oil Volatility Index (OVX) has risen to 35.8, reflecting market anxiety. However, there are signs of weakening demand that could pressure current prices. The latest Energy Information Administration (EIA) report indicated an unexpected increase in US crude inventories of 3.1 million barrels, suggesting that consumption might be lower than expected as we approach the new year. Adding complexity, OPEC+ decided in their early December meeting to keep production quotas the same. They appear willing to let geopolitical risks support prices for now but are also ready to act if demand declines significantly. This creates a safety net for the market, making sharp downturns less likely in the immediate future. In the upcoming weeks, this creates a favorable setting for using options strategies to handle uncertainty. Given the high implied volatility, a cautious approach may involve straddles or strangles, which could profit from significant price swings as the market assesses whether supply fears or demand weakness will prevail. Selling covered calls against existing long positions could also earn income while providing some downside protection. We will closely monitor weekly inventory reports during the holiday season for insights into demand. Any changes in maritime activity in the Middle East will be the main short-term trigger. Traders should stay alert, as news can easily overshadow fundamental data in this climate. Create your live VT Markets account and start trading now.

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The NZD/USD pair is holding near its highest point since early October, remaining stable during the Asian session. A weak US Dollar (USD) and a positive market outlook are boosting bullish expectations, despite strong growth figures from the US.

Economic Growth and Policy

The US economy grew by 4.3% annually from July to September, exceeding expectations. Still, many anticipate further easing of Federal Reserve policies due to low consumer inflation and hints of a slowing job market. US President Trump has emphasized that the new Fed Chair should lower interest rates, putting additional pressure on the USD, which benefits the NZD/USD pair. The New Zealand Dollar (Kiwi) is also supported by the Reserve Bank of New Zealand’s firm approach to policy. Positive risk sentiment is weakening the USD’s appeal as a safe-haven asset, allowing the NZD to thrive. Traders are keeping an eye on upcoming US jobless claims data and Fed leadership decisions for more clues on currency direction. The NZD is influenced by the local economy, dairy prices, and its main trading partner, China. Decisions made by the Reserve Bank of New Zealand regarding interest rates directly affect the value of the NZD. Typically, strong economic data will lift the NZD, while overall risk sentiment also affects its worth.

Market Dynamics and Strategies

With the NZD/USD staying strong near the 0.5850 mark, there is a clear difference in central bank policies that will guide trading strategies. The US Federal Reserve is leaning dovish, while the Reserve Bank of New Zealand is hawkish. This key difference supports a potential upward trend for the currency pair as we move into the new year. The USD’s weakness is highlighted by recent data that overshadows the robust Q3 2025 GDP report. The November 2025 US Consumer Price Index dropped to 2.8%, and the latest Non-Farm Payrolls report showed a job growth of just 155,000. Both of these factors strengthen the argument for Fed rate cuts in 2026, keeping pressure on the dollar. In contrast, the NZD has various strengths beyond its central bank’s stance. The recent Global Dairy Trade auction in December 2025 showed prices rising for the fourth time in a row, boosting an important export sector. Additionally, a rebound in China’s industrial production offers a positive outlook for New Zealand’s largest trading partner. For traders dealing in derivatives, this environment suggests preparing for further NZD/USD strength in the upcoming weeks. Buying call options with expiration dates in late January or February 2026 can capture potential gains. Selling out-of-the-money put options is another strategy to express this bullish outlook while earning premiums. However, it is important to note that we are currently in the holiday period, which can lead to lower liquidity. Historically, the time between Christmas and New Year can result in larger price swings due to reduced trading volume. Therefore, traders should manage their position sizes carefully and consider option spreads to mitigate risks from any sudden volatility. Create your live VT Markets account and start trading now.

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