Colombia’s Consumer Price Index (CPI) for November rose by 0.07% month over month. This figure was below the expected increase of 0.2%.
The FXStreet team also provided additional market updates. The EUR/USD pair fell towards 1.1630 due to a mild upswing in the US Dollar.
The GbpUsd Pair’s Movement
The GBP/USD pair retreated to the 1.3320 mark following a brief bullish moment in the US Dollar. Gold prices shifted back to $4,200 per troy ounce amidst a strengthening in US Treasury yields.
Bitcoin maintained stability above $91,000, while Ethereum remained above $3,100. Both cryptocurrencies appeared optimistic ahead of the Federal Reserve’s upcoming policy meeting.
Ripple’s decline extended for a second day, trading at $2.06, even with ongoing inflows into XRP spot ETFs. The article also mentioned upcoming monetary policy meetings from other major banks including RBA, BoC, and SNB.
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The Federal Reserve’s Influence on Markets
With the Federal Reserve’s meeting just days away on December 10, we see the market has overwhelmingly priced in a rate cut. This suggests that straightforward long positions are crowded, and traders should consider options strategies that benefit from a volatility spike if the Fed’s forward guidance is less dovish than expected. Historically, markets can react poorly to a “hawkish cut,” a pattern we observed in late 2018 when a rate cut was accompanied by a cautious outlook.
We anticipate the US Dollar’s weakness will persist if the Fed delivers the expected dovish message. The U.S. Dollar Index (DXY) has already fallen over 5% in the last quarter, a trend that supports holding call options on assets like gold, which is trading firmly above $4,200 an ounce. Given gold’s sharp 18% rally in 2025, using some premium to buy protective puts could be a prudent way to hedge against a sudden reversal on a hawkish surprise.
The lower-than-expected inflation in Colombia is a significant local factor that fits the global disinflation narrative. This 0.07% reading puts pressure on the Banco de la República to consider its own rate cuts in early 2026, a move that would likely weaken the Colombian Peso. We expect traders to begin positioning for this by buying call options on the USD/COP pair.
This broader risk-on sentiment continues to lift equities and crypto assets, with Bitcoin’s recent surge past $90,000 demonstrating the market’s high sensitivity to liquidity expectations. The cooling US PCE inflation data solidifies these rate cut hopes, making call options on the Dow Jones a viable strategy. We believe this momentum will carry into the Fed’s announcement next week.
