The ISM Services PMI for December in the United States exceeded expectations, recording a value of 54.4 compared to the predicted 52.3. This marks an improvement in the services sector, indicating a stronger performance than anticipated.<\/p>\n
In the commodities market, gold experienced a decline in price, nearing $4,450 per troy ounce. This occurred after a three-day rally halted, influenced by a firmer US Dollar and declining US Treasury yields.<\/p>\n
In the forex market, the EUR\/USD pair continued its bearish trend, falling below the 1.1700 level. Meanwhile, the GBP\/USD pair also faced pressure, dipping to a daily low of 1.3470.<\/p>\n
Ripple (XRP) faced selling pressure, but managed to hold support at $2.22 amidst a volatile cryptocurrency market. This downturn comes as fear spreads across the market, affecting gains made earlier in the year.<\/p>\n
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The December ISM Services PMI came in hot at 54.4, crushing expectations and signaling that the US economy carries significant momentum into the new year. This is the highest reading we’ve seen in six months, largely driven by the business activity component which jumped to 56.1. This robust data suggests the slowdown we anticipated throughout 2025 has not fully materialized.<\/p>\n
This strong service sector activity throws cold water on the idea of an early interest rate cut from the Federal Reserve. We’ve seen the probability of a March rate cut, as priced by fed funds futures, drop from over 70% just two weeks ago to below 40% this morning. The market is now quickly repricing for a “higher for longer” interest rate environment.<\/p>\n
Consequently, we are seeing renewed strength in the US Dollar, which is likely to be the prevailing trend in the coming weeks. Short-term derivative strategies should favor dollar strength against currencies like the Euro and Pound Sterling, which are already showing weakness. Look for put options on EUR\/USD as it struggles to stay above 1.1670.<\/p>\n
The rally in Gold appears to have stalled, with prices pulling back from the $4,500 level as haven demand wanes. This is reminiscent of the price action we saw during periods of resilient economic data in 2024, where strong PMIs and jobs reports consistently capped gold rallies. Bearish positions, like selling call options on gold futures, look attractive here.<\/p>\n
The stronger dollar is also creating headwinds for WTI crude, pushing it lower. This is compounded by the latest Energy Information Administration report showing a surprise build in US crude inventories of 2.3 million barrels. The combination of a strong dollar and ample supply suggests oil prices will remain under pressure.<\/p>\n
The one exception to broad dollar dominance could be against the Japanese Yen. Hawkish commentary from the Bank of Japan continues to provide a strong floor for the Yen, creating a tight trading range for USD\/JPY. Volatility in this pair may remain compressed, making it suitable for range-bound strategies like iron condors.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" U.S. services sector strengthens, gold retreats, EUR\/USD declines, and Ripple holds key support amid volatility.<\/p>\n","protected":false},"author":62,"featured_media":16964,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38513","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\/38513","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=38513"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16964"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}