Eurozone construction output decreased by 0.8% year-on-year in November, down from the previous figure of 0.5%. This decline highlights evolving economic conditions across the Eurozone during this period.
Silver is trading near all-time highs due to geopolitical tensions, while gold has surpassed $4,700 driven by similar risks and trade concerns. The EUR/CHF is sliding towards a four-week low as trade tensions bolster the Swiss Franc.
Forex Market Reactions
The EUR/USD has reached a two-week high above 1.1700, driven by the focus on the EU-US Greenland dispute. GBP/USD has modestly retreated but remains near 1.3450, as economic data from the UK holds less attention compared to international conflicts.
Bitcoin has extended its losses, trading below $91,000 amidst the mounting geopolitical tensions over Greenland, with investors favouring gold as a safe-haven asset. The new tariffs threatened by President Trump include a 10% rate on goods from several European countries, potentially affecting investment sentiment.
Bitcoin, Ethereum, and Ripple are witnessing losses as geopolitical uncertainties rise, affecting their market sentiment. Additionally, lists of top brokers for 2026 are provided, catering to various needs like low spreads, high leverage, and specific platforms.
Impacts of Trade Wars
The market is being driven entirely by the new trade war fears over Greenland, so we must ignore most standard economic data for now. Our primary focus should be on the broad-based US dollar weakness and the flight to traditional safe-haven assets. This “Sell America” sentiment creates a unique environment where both the dollar and risk assets are falling together.
Gold’s surge above $4,700 an ounce is the clearest signal in the market, and we believe this momentum will continue. We are looking to add to long positions through call options on XAU/USD to capture further upside as geopolitical risks build toward the February 1 tariff date. This pattern is reminiscent of the 2019 US-China trade dispute, which sent gold soaring as uncertainty peaked.
Given the intense selling pressure on the dollar, we should maintain a short bias on the currency. The US trade deficit, which we saw widen consistently through 2025, already provides a poor fundamental backdrop for the dollar. Shorting dollar futures or buying put options on dollar-tracking ETFs are direct ways to play this trend.
The Euro is strengthening against the dollar by default, pushing EUR/USD above 1.1700. While it is tempting to go long, we must be cautious as Europe is the direct target of the proposed tariffs. The recent data showing Eurozone construction output fell -0.8% highlights an underlying weakness that could make this rally fragile.
Sterling presents a complicated picture, caught between dollar weakness and the UK being on the tariff list. Bets on Bank of England rate cuts, which gained traction late last year, are also weighing on the pound. For GBP/USD, option strategies that bet on increased volatility, like a straddle, may be more prudent than a simple directional trade.
Bitcoin’s sharp decline below $91,000 confirms that it is being treated as a high-risk asset, not a safe haven. Investors are fleeing to gold, following the classic playbook we saw during the major risk-off event of March 2020. We expect further downside for crypto as long as geopolitical tensions remain this high, making put options or short futures viable positions.
