background image background image background image

NY Open: US dollar firm to end the week

Equities 4 minutes to read
Michael O’Neill

FX Trader,

Summary:  US stock markets are sounding a slight tentative note, but the January rally remains firmly intact in early trade.

The US dollar is marginally higher against the G10 major currencies this morning and set to close the week on a firm note. A drift to more positive risk sentiment lifted the greenback 1.24% against the Japanese yen and 1.13% against the Swiss franc since Monday.

FX traders seem to want to believe that the US and China will come to terms on trade.

USDCAD was in the spotlight at 1230 GMT when Canadian inflation data was released, but despite great number, it is currently close to unchanged since Monday. CPI rose 2.0%, year-on-year, in December, easily beating the forecast for a gain of 1.7%. Core CPI rose 1.7%, y/y.

Last week, the Bank of Canada said in its monetary policy statement that low oil prices would depress inflation rates throughout 2019. That may be why USDCAD losses following the data evaporated as quickly as they did. USDCAD dropped from 1.3270 to 1.3235 and then climbed back to 1.3260. It also may be because the US dollar was grinding higher against the majors.
CPI and CPI ex. gasoline
Source: Statistics Canada
Wall Street popped at the open, following on the heels of big equity market upswings in Asia and Europe and is poised to close out the week with healthy gains. The Treasury Department denied that Treasury Secretary Mnuchin proposed an easing of China tariffs, as reported in the Wall Street Journal, but traders are hope a trade deal will get done.

The European Central Bank and Bank of Japan policy meetings, plus the Davos forum should be the main attractions next week. EURUSD bulls may be disappointed. Mario Draghi’s dovish remarks to the European Parliament suggest another cautious ECB statement is on the cards, with the ECB chief stating that  “a significant amount of monetary-policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term.”

Davos may not be very exciting now that President Trump cancelled, but traders won’t mind as their attention will be focused on UK politics and Brexit developments. There are only 70 days until the March 29 deadline and the British plan is in disarray. GBPUSD and GBP crosses are vulnerable to sound bites and headlines. US markets are closed on Monday, for Martin Luther King Day.
USDCAD (15-minute, source: Saxo Bank)


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992