background image background image background image

NY Open: US dollar firm to end the week

Equities 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

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
USDCAD (15-minute, source: Saxo Bank)

Disclaimer

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 (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-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

Singapore
Singapore

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 www.home.saxo/en-sg/about-us/awards.

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.