The dollar continued to slide Tuesday morning as more pressure mounted ahead of the Federal Reserve’s monetary announcement Wednesday. Meanwhile, oil plunged and China’s President sends a strong message.

Two Federal doves

On the second day of the Fed meeting, the FOMC gave to thee, a rate hike and dovish monetary policy!

In all seriousness, the Federal Reserve is expected to deliver some dovish news tomorrow alongside its fourth rate hike of the year.

The Federal Reserve has already hinted at pausing rate hikes in 2019 as the economy isn’t operating as one that needs more tightening. The Fed has also been widely criticized by President Trump, who tweeted Tuesday morning that he hopes the Fed doesn’t “make yet another mistake” and that they “don’t let the market become any more illiquid than it already is.”

More investors are starting to see Trump’s point as inflation is minor, the dollar is relatively strong and other risks are starting to appear in the data.

While the FOMC will likely go forward with the change from 2.25% to 2.5%, there could be a change in the dot plot or in the language used around future rate adjustments.

All this caused the dollar to slip Tuesday morning. The EUR/USD pair grew from 1.134 to a one-week high of 1.140. But as markets started to price in the idea of the dovish hike the pair fell back to 1.137.

The GBP/USD pair also climbed this morning from around 1.265 to 1.269. Brexit uncertainty was briefly put on the backburner since the vote was pushed to the week of Jan. 14, but then the pair fell back to 1.265.

Nobody puts Xi in a corner

China’s President Xi Jinping is ending the year with some defiant words about his country and the trade war with the U.S.

Marking the 40th anniversary of the reform era, Xi said “no one is in position to dictate to the Chinese people what should and should not be done.”

Xi didn’t announce any new policy in his speech and reaffirmed China’s pursuit of innovation in the technology sector.

Oil hits fresh lows

A barrel of West Texas Intermediate plunged to the lowest levels since September 2017.

WTI hit $45.15 per barrel Tuesday morning following a sell off of risk assets. There is less optimism about the effectiveness of the OPEC+ production cut agreement.

The USD/CAD pair is at one-week highs of 1.342 as the commodity-linked loonie takes a hit