John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 07 February 2018 at 22:56 GMT

US Wrap: Is the US a currency manipulator? ECB official thinks so

FX Trade Strategist /
  • Wall Street closes mixed after roller-coaster ride 
  • Oil prices tumble following rise in US production 
  • ECB’s Nowotny calls the US a currency manipulator 

By Michael O’Neill

NY Focus: US dollar bulls were strutting their stuff at the start of the session and continued to do so until the day ended.  

News of the latest German government coalition undermined EURUSD as the Finance portfolio was given to Social Democrat, whom many believe will increase support for indebted Eurozone economies. 

EURUSD selling accelerated when ECB Council member Ewald Nowotny accused the US government of deliberately weakening the US dollar. EURUSD dived from 1.2338 at the open to 1.2261 at the close.

The price of US crude dropped overnight to $61.27/barrel due to oversupply. Photo: Shutterstock

Sterling traded erratically in a 1.3850-1.3935 range and closed unchanged for the day, supported by the pending Bank of England meeting.

USDJPY rallied in concert with the broad dollar strength and supported by the rise in US Treasury yields.

The commodity currency bloc traded steadily but lower throughout the day. NZDUSD weakness accelerated at the end of the day when the RBNZ left rates unchanged and delivered a somewhat dovish policy statement.

Oil prices plunged on news that US crude production rose to 10.25 million barrels per day while crude inventories increased as well. WTI oil dropped from $63.86 to $61.27/barrel.

Thursday Focus: Sterling may overshadow EURUSD moves on Thursday. The Bank of England interest rate decision, policy statement and Quarterly Inflation Report are due.  

The BoE is expected to provide a hawkish shift in rhetoric and upgraded 2018 GDP forecast. If the BoE disappoints, and EURUSD remains under pressure, GBPUSD may break support in the 1.3830-40 area and drop towards 1.3600.  

A move above the 1.3980-00 area would lead back to 1.4200.

GBPUSD four-hour chart
Source: Saxo Bank

-- Edited by Adam Courtenay

Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

Market Predator Market Predator
Hello Michael. Interesting you mentioned US production. Also Ole Hansen did earlier before in his report (production of Lower48 + Alaska). Next parameter for me to follow. I like the picture from Shutterstock :)


The Saxo Bank Group entities each provide execution-only service and access to 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 Rules of Engagement and (v) Notices applying to 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 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 or as a result of the use of the 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. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. 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 ourtrading 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 Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail