background image background image background image

NY Open: Greenback slip, sliding away

Forex 4 minutes to read
Michael O’Neill

FX Trader,

Summary:  Green shoots of recovery are evident in equities ahead of the Fed's monetary policy announcement later today. But the greenback is grinding lower in tack with wilting Treasury yields.

The greenback is grinding lower, slowly but steadily in the run-up to the Federal Open Market Committee meeting. US dollar sellers are taking their lead from 10-year US Treasury yields which have ticked down from 2.823% to 2.810%. Those traders expect a “dovish” tilt to the FOMC statement, Summary of Projections and from Fed chair Jerome Powell. 

Powell got the dovish ball rolling at the end of November when he said that interest rates were “just below” neutral, a marked change from his previous comment that rates were “a long way from neutral”. Traders are hoping that the FOMC will help them rebuild from the carnage on Wall Street for the past two weeks. It has already started. European bourses and the major US equity indices are modestly higher. The Dow Jones Industrial Average gained 0.67% as of 1400 GMT.

EURUSD opened in New York at 1.1364 and is trading at 1.1428. A break above resistance at 1.1440 would trigger a sharp rally to 1.1510, which is the 50% Fibonacci retracement level of the September-November range.

USDJPY is suffering from the drop in US Treasury yields and is probing uptrend channel support which has survived multiple tests since June. A decisive break below 112.10 would extend losses to 110.70

Oil traders are still reeling from yesterday’s 7.0% plunge. Prices have found a short-term bottom in the $45.80-$46.00/barrel area. Some traders believe thin, holiday markets exaggerated the oil price drop. Prices will also find support from positive news around the US/China trade talks.

The drop in oil spanked the Canadian dollar. USDCAD rallied from 1.3393 to 1.3495 yesterday and then spent the overnight session in a 1.3451-1.3480 range. Canadian CPI was -0.4% in November, which was “as expected” because of the drop in oil prices. USDCAD ignored the data and sank on the back of broad US dollar weakness.
Chart: EURUSD 4-hour. Source: Saxo Bank


The Saxo 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 is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, 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 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 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 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 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 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 (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.