The M4 money supply in the United Kingdom increased to 4.7% year-on-year in December, up from a previous 4.3%. This indicates a rise in the total amount of money circulating within the economy.<\/p>\n
Gold experienced aggressive corrections as profit-taking and a firmer US Dollar exerted pressure. Meanwhile, the USD\/JPY currency pair fell below 154.00 following news concerning Trump’s Fed Chair choice.<\/p>\n
The EUR\/USD currency pair advanced to 1.1950 after better-than-expected economic data from Germany and the Eurozone. GBP\/USD approached 1.3800 as the US Dollar weakened and anticipates upcoming US Producer Price Index data.<\/p>\n
Gold priced above $5,100 following US President Donald Trump’s Fed Chair nomination. Stellar experienced a dip to a three-month low, trading below $0.20 due to a risk-off sentiment affecting the market.<\/p>\n
Microsoft’s market value decreased by $400 billion, marking the second-highest sell-off on record. Bitcoin, Ethereum, and Ripple faced weekly losses of nearly 6%, 3%, and 5% respectively, with Bitcoin nearing its November lows.<\/p>\n
The confirmation of Kevin Warsh as the next Fed Chair is shifting our entire market outlook. The US Dollar immediately weakened because Warsh is widely viewed as more dovish, meaning we can expect a slower pace of interest rate hikes or even potential cuts. This dollar weakness is the primary driver we must trade against in the coming weeks.<\/p>\n
We should look to build long positions in EUR\/USD, as the pair is now targeting the 1.1950 level. This move is supported by fundamentals, as recent data showed the Eurozone economy expanded by 0.5% in the fourth quarter of last year, beating forecasts and suggesting the European Central Bank has room to maintain a stable policy. We can use call options to play for a move towards the 1.2000 psychological barrier.<\/p>\n
In the UK, the M4 money supply grew by 4.7% in December 2025, a rate we haven’t seen since the post-pandemic recovery period of 2022. This signals significant inflationary pressures, which, combined with the weak dollar, makes long GBP\/USD trades attractive towards the 1.3800 handle. However, we must watch for any signs that this inflation is beginning to damage UK growth prospects.<\/p>\n
Gold’s rally above $5,100 is a direct consequence of the Fed news and should continue. A dovish Fed reduces the opportunity cost of holding non-yielding assets like gold, and a weaker dollar makes it cheaper for foreign buyers. We see this as a sustained trend, and buying gold futures or call options on gold ETFs is a clear strategy.<\/p>\n
We need to be cautious in the technology sector, as Microsoft’s historic $400 billion single-day loss shows extreme vulnerability in large-cap names. For perspective, that loss is greater than the entire 2024 GDP of nations like Portugal or New Zealand. This suggests a potential rotation out of big tech, and we should consider hedging with puts on the Nasdaq 100 index.<\/p>\n
The crypto market is completely disconnected from this macro story and remains in a deep downtrend. Bitcoin is approaching its November 2025 lows near $80,000, and funding rates in the derivatives market are negative, indicating traders are overwhelmingly bearish. We should avoid trying to catch a falling knife and instead follow the bearish momentum with short positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" M4 money supply rose, gold corrected, USD weakened, and cryptocurrencies, Microsoft saw significant market losses.<\/p>\n","protected":false},"author":62,"featured_media":17028,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40539","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\/40539","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=40539"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40539\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17028"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}