Germany’s retail sales for December registered a marginal increase of 0.1%, outperforming the forecasted decline of -0.2%. This indicates a slight recovery in consumer spending during the month.<\/p>\n
Elsewhere in the markets, Bitcoin fell below $75,000, marking an 11% drop compared to the previous week. Cardano also saw a decline, trading below $0.28, with a correction of over 15% from the last week.<\/p>\n
The nomination of Kevin Warsh as the Federal Reserve chair emerged as a point of concern in European currencies and gold. The EUR\/USD remains weak near 1.1850, and Gold has experienced a correction, reaching new monthly lows.<\/p>\n
In other market movements, the Pound Sterling weakened, while the USD\/INR experienced a fall amid the Reserve Bank of India’s intervention to support the Indian Rupee. The financial community continues to monitor upcoming US ISM Manufacturing PMI data for further guidance on market trends.<\/p>\n
We remember how the market reacted in early 2025 when Kevin Warsh was nominated for Fed Chair, causing a significant rally in the US Dollar. That period saw EUR\/USD fall toward 1.18 and GBP\/USD break below 1.37 as traders priced in a more aggressive central bank. Looking back now, it serves as a clear playbook for how markets respond to a hawkish pivot from the Federal Reserve.<\/p>\n
This kind of announcement creates major price swings, and we saw volatility spike during that week in 2025, with the VIX climbing above 20. For the coming weeks, we should anticipate similar movements around key central bank speeches. Traders can use options to position for this, as buying straddles or strangles on major currency pairs ahead of big announcements could be a valuable strategy.<\/p>\n
At the time, the slight positive surprise in German retail sales did little to support the Euro, as the Fed’s policy outlook was the only story that mattered. Today, the situation is different, with recent Eurostat data from January showing Eurozone inflation holding at 2.8%, keeping pressure on the ECB. This contrasts with the US, where the latest CPI report shows inflation has cooled to 3.1%, suggesting the Fed’s aggressive cycle from last year might be nearing its end.<\/p>\n
The sharp drop in gold during the 2025 “Warsh effect” was a direct result of a stronger dollar and rising yield expectations, which makes non-yielding assets less attractive. This inverse relationship remains critical for us to watch in the weeks ahead. Given that the dollar index has softened by nearly 2% since its peak last November, call options on gold could provide upside exposure if the Fed signals a more neutral stance.<\/p>\n
Similarly, the pound was hit hard last year, but the UK’s economic picture has changed. The latest report from the Office for National Statistics showed UK inflation remains the highest in the G7 at 4.0%, forcing the Bank of England to maintain a hawkish tone. Therefore, unlike in 2025, the pound may now show more resilience against the dollar, and we could consider selling put options on GBP\/USD to collect premium.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Germany retail sales rise slightly; Bitcoin and Cardano drop; Warsh nomination impacts currencies, gold weakens.<\/p>\n","protected":false},"author":62,"featured_media":17027,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40667","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40667"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40667\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17027"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}