In November, the United States Core Personal Consumption Expenditures Price Index showed an increase of 0.2% month-over-month. This meets market expectations, with the core PCE inflation reaching 2.8% that month.<\/p>\n
The Euro edged higher against the Dollar due to a softer US data, and fewer trade tensions between the US and EU, resulting in increased risk appetite. The GBP\/USD also rose to near two-week highs as the easing of trade de-escalation supported a more favourable outlook.<\/p>\n
Gold has continued its upward trend, nearing record highs at $4,880 per troy ounce, as the US Dollar weakened. Bitcoin, Ethereum, and XRP saw slight gains amidst oscillating crypto market conditions, with XRP defending $1.90 as a short-term support level.<\/p>\n
Donald Trump’s reversal on NATO tariffs signals a shift towards de-escalation, which initially seemed to exacerbate tensions. The ETF inflow has positively impacted XRP despite ongoing retail caution, indicating shifts in market dynamics.<\/p>\n
Back in November 2025, we saw in-line inflation data at 2.8% create a weaker dollar and a rally in risk assets. However, the landscape has changed as we enter late January 2026. The most recent Core PCE data for December, released last week, showed a slight uptick to 2.9%, suggesting that inflation remains more stubborn than previously hoped.<\/p>\n
This persistent inflation is forcing a major repricing of Federal Reserve interest rate expectations. According to the latest data from the CME FedWatch tool, markets are now pricing in less than a 40% chance of a rate cut by March, a sharp drop from over 70% just one month ago. This shift implies the Fed will remain cautious for longer than we anticipated at the end of last year.<\/p>\n
Consequently, the dollar weakness we enjoyed in late 2025 is reversing, with the DXY index climbing over 1.5% in the last two weeks alone. We should anticipate continued pressure on pairs like EUR\/USD and GBP\/USD, which are now trading well below the highs seen in November. Options traders could consider buying puts on these currencies to hedge against further dollar strength.<\/p>\n
The outlook for Gold has also shifted, pulling back from the $4,900 levels targeted back in November. Higher-for-longer interest rates increase the opportunity cost of holding non-yielding assets like gold, which has retreated to the $4,750 range. Look for volatility to remain high as the market digests the new rate path.<\/p>\n
Adding to the uncertainty, the trade de-escalation we saw in late 2025 appears to be fading. Renewed headlines about US-EU friction over digital services taxes are reintroducing volatility. Traders should use derivatives to prepare for potential swings related to any new tariff announcements.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US core PCE inflation rose 0.2%; gold nears highs; XRP holds $1.90 amid easing trade tensions.<\/p>\n","protected":false},"author":62,"featured_media":16963,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39880","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\/39880","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=39880"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39880\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16963"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}