In December, Switzerland’s year-on-year real retail sales rose by 2.9%, surpassing expectations set at 2.5%. This increase indicates a stronger performance in the retail sector than initially anticipated.
Across the currency markets, EUR/USD remains weak near 1.1850 due to a firm US Dollar following Kevin Warsh’s potential nomination as Fed Chair. GBP/USD fell below 1.3700 amid speculation about possible changes under Warsh’s leadership.
Gold and Cryptocurrency Market Trends
In commodities, gold prices corrected to fresh monthly lows around $4,400, pressured by profit-taking and the strengthening US Dollar. Cardano’s price dipped below $0.28, reflecting a broader downturn in the cryptocurrency market, as Bitcoin’s value fell below $75,000.
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The market is clearly being driven by the nomination of a new, more hawkish Fed Chair. We’ve seen the US Dollar Index surge by 1.5% in the last five trading days alone, pushing it to its highest level since November 2025. This strength makes buying call options on the dollar or selling futures on weaker currencies like the Euro and Pound an attractive strategy for the coming weeks.
Profit Taking in Gold Market
We are seeing predictable profit-taking in gold, which is now pulling back from its recent historic high above $4,550 an ounce. This mirrors the pattern from 2013’s “Taper Tantrum,” where the mere prospect of tighter monetary policy sent precious metals lower. Derivative traders should consider buying put options on gold futures, anticipating a further slide as the market prices in higher US interest rates.
Don’t overlook the strong data coming out of Switzerland, with retail sales beating expectations. This fundamental strength, combined with a record-low unemployment rate of just 2.1%, makes the Swiss Franc resilient. We see an opportunity to short the EUR/CHF pair, playing the strong Franc against a Euro that is struggling to gain traction despite its own positive data.
All eyes are now on the upcoming US ISM Manufacturing PMI data later today. A strong reading would validate the hawkish Fed narrative and could trigger another sharp move, while a miss could cause a rapid reversal. With currency market volatility already up 20% in the last week, using straddles or strangles on major pairs like EUR/USD allows us to profit from a big move in either direction.
