The United States 4-week bill auction rate dipped to 3.57% from the previous 3.58%. This slight decline in the rate represents a minor change in the short-term government borrowing costs.<\/p>\n
In currency markets, USD\/CAD is near five-month lows due to the policy divergence between the Bank of Canada and the Federal Reserve. The GBP\/USD also experienced a slight slip during holiday-thinned trading.<\/p>\n
Gold retreated from record highs, now trading below $4,500, as profit-taking emerged. The dollar’s selling bias continues amid expectations of looser Fed policy, while Bitcoin fell below $87,000, with US-listed spot ETFs seeing a withdrawal of $188.64 million.<\/p>\n
The economic outlook for 2026-2027 in advanced countries suggests a promising period with ongoing supportive factors from 2025. Meanwhile, Avalanche is trading close to $12 as Grayscale updated its form to convert its Trust into an ETF.<\/p>\n
Both the EUR\/USD and GBP\/USD are trading in narrow ranges due to subdued market activity around the holiday season. The subdued trading environment has kept these currency pairs relatively stable.<\/p>\n
With the 4-week Treasury bill yield dipping slightly, we see confirmation that the market does not expect any hawkish surprises from the Federal Reserve in the near term. The CME FedWatch Tool is currently pricing in an 85% probability of a rate cut by the end of the first quarter of 2026, which supports a risk-on sentiment. This low-rate expectation suggests selling short-dated call options on the VIX, as complacency may settle in after the holidays.<\/p>\n
The US Dollar\u2019s weakness, especially against commodity currencies like the Canadian loonie, appears poised to continue into the new year. With the Dollar Index (DXY) hovering near 98.50, a level not consistently seen since early 2024, the path of least resistance is lower. We believe this makes buying call options on currency ETFs like FXC (Canadian Dollar) and FXA (Australian Dollar) a prudent strategy for early January.<\/p>\n
Gold’s retreat from its all-time high above $4,520 seems to be a textbook holiday-season pullback on thin volume, not a change in the underlying trend. We note that open interest in gold futures has actually increased by 2% this week, suggesting new buyers are using this dip as an entry point. Therefore, any move below the $4,500 level should be seen as an opportunity to build long positions through call spreads on gold and silver futures.<\/p>\n
Equity markets are quiet, but the forecast for 2026 remains bullish on expectations of strong growth. Implied volatility on the S&P 500 has compressed to a 24-month low of 11.2, making options relatively cheap compared to the volatility we experienced back in 2023. This creates a compelling case for buying long-dated call options or LEAPS on major indices like the SPX and NDX to position for the anticipated rally.<\/p>\n
Bitcoin’s current weakness below $87,000 is directly tied to ETF outflows, which have totaled over $500 million in the past week. While this presents short-term pressure, it contrasts with the institutional accumulation we saw throughout most of 2025. This divergence suggests considering protective put options or put spreads to hedge spot holdings against a potential drop toward the $82,000 support level in the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CAD nears five-month lows; gold retreats; Bitcoin dips; subdued holiday trading stabilizes major currencies.<\/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-37713","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-ca\/wp-json\/wp\/v2\/posts\/37713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37713"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37713\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17027"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}