Eurozone private loans experienced a year-on-year increase of 2.9% in November, surpassing the anticipated 2.8%. This growth is observed despite the broader economic conditions post-New Year holidays.
The EUR/USD currency pair showed a retreat towards 1.1700 due to a modest recovery in the US Dollar, with trading conditions remaining thin. Similarly, GBP/USD stabilised around 1.3450, unable to gain much traction during the holiday period.
Gold Prices on the Rise
Gold prices saw an increase towards $4,400, registering a gain of more than 1.5% after a significant correction. This upward movement is influenced by expectations of a dovish Federal Reserve policy and ongoing geopolitical risks.
Cardano started the New Year positively, trading above $0.36, driven by improving on-chain data and a favourable technical outlook. Projections for 2026 reveal that advanced countries may experience solid economic performance, building on resilience seen in 2025.
The crypto market outlook for 2026 indicates potential growth, with the sector having been volatile in 2025. Positive catalysts include favourable regulatory changes, the rise of Digital Asset Treasuries, and increased adoption of AI and tokenization.
The slightly better-than-expected private loan growth we saw in the Eurozone last November suggests some underlying economic strength. However, the US dollar’s recent recovery is keeping the EUR/USD pair under pressure, pushing it toward the key 1.1700 level. We are watching to see if this dollar strength is a short-term holiday effect or the beginning of a new trend for the first quarter.
Expectations for Federal Reserve Policy
The primary market driver remains the expectation of a more dovish Federal Reserve policy throughout 2026. This sentiment is the main reason gold is pushing towards $4,400 an ounce, supported by continued strong central bank buying, a trend we’ve seen since 2024. With the CME FedWatch tool indicating a high probability of further rate cuts by March, traders should consider using call options to gain upside exposure to precious metals.
This broad optimism for 2026 supports a risk-on mood, which is quite different from the economic uncertainty we navigated back in 2024. This can be seen in alternative assets like Cardano, which is showing positive momentum to start the new year. This suggests that dips in equity indices and growth-oriented assets may be seen as buying opportunities in the coming weeks.
Trading volumes are still thin following the New Year, causing pairs like GBP/USD to trade sideways near 1.3450 without clear direction. Implied volatility on major currency options is currently low, but this will likely change as full trading volumes return. This period could present a chance to position for a breakout in volatility by considering strategies like long straddles on pairs that have been consolidating.
