The EUR\/USD exchange rate returned to below 1.1800, reflecting increased US Dollar strength. Similarly, the GBP\/USD rate saw fluctuations, retreating to recent lows before recovering slightly in light of the strong US Dollar and upcoming Bank of England meeting.<\/p>\n
Gold prices continued their downward trend, remaining below $4,700 per troy ounce. Meanwhile, Ethereum’s treasury firm Bitmine increased its holdings significantly, acquiring over 41,000 ETH. Lastly, reduced on-chain activity saw XRP stabilising after a week of challenges in the crypto market.<\/p>\n
In 2026, brokers are evaluated based on their spreads, offerings, and platforms to assist traders in selecting suitable partners. Top broker options are discussed, catering to various trader needs across different regions and trading preferences.<\/p>\n
The January manufacturing PMI data has completely changed the landscape for the coming weeks, coming in at 52.6 when we were expecting a contraction below 48.5. This surprise strength suggests the US economy is far more robust than anticipated, forcing a major repricing of assets. A stronger US dollar is the most immediate and likely outcome of this report.<\/p>\n
We must now reassess the Federal Reserve’s path, as the case for imminent interest rate cuts has significantly weakened. The derivatives market, which just last week was pricing in over a 60% chance of a rate cut by July, has seen those odds plummet to below 25% in overnight trading. This means we should consider strategies that bet against rate cuts, such as selling Fed Funds futures or buying options that profit from stable to higher rates.<\/p>\n
For currency traders, this points to renewed strength in the greenback, especially against the Euro and Pound. We are already seeing the EUR\/USD pair fall back below the 1.1800 level, a trend that is likely to continue. Buying call options on the US Dollar Index (DXY) or put options on the EUR\/USD offers a direct way to position for this move.<\/p>\n
This strong dollar environment, combined with rising bond yields, creates a powerful headwind for precious metals. Gold is already under pressure, and we saw a similar pattern in late 2025 when stronger-than-expected economic data led to a sharp sell-off in the metal. Traders should consider buying puts on gold futures, as the path of least resistance appears to be lower for now.<\/p>\n
In the equity markets, the reaction may be more mixed, but an increase in volatility is almost certain. While a strong economy is good for earnings, the prospect of higher-for-longer interest rates will challenge stock valuations. We expect the VIX, which has been hovering near its 12-month low of 13, to see a significant bid as the market digests these new rate expectations.<\/p>\n
This situation reminds us of the third quarter of 2025 when markets were consistently caught offside by underestimating the resilience of the US economy. The data then, as now, suggested that betting against American economic performance was a losing trade. We should expect this trend of upward surprises to continue, warranting a bullish stance on the dollar and a cautious view on assets sensitive to interest rates.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US manufacturing strengthens; silver drops over 5%; gold, currencies fluctuate; Ethereum holdings grow; XRP stabilizes.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40718","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\/40718","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=40718"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40718\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}