Connect with us

Hi, what are you looking for?


Dollar Rebounds; Traders Reassess Omicron Risks

Forex18 minutes ago (Nov 29, 2021 03:09AM ET)

(C) Reuters

By Peter Nurse – The dollar traded higher Monday, boosted by higher U.S. Treasury yields as traders considered Friday’s sharp moves on the discovery of the omicron coronavirus variant as overdone.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 96.310, after dipping to a one-week low of 95.973 on Friday.

USD/JPY rose 0.1% to 113.42, after the yen, which had been the biggest beneficiary of Friday’s flight to quality, surged as much as 2% on Friday, with the pair dropping to 113.05.

EUR/USD fell 0.4% to 1.1271, while GBP/USD dropped 0.1% to 1.3329, off Friday’s 11-month low of 1.3278, while the risk-sensitive AUD/USD rose 0.3% to 0.7147, recovering after a 1% tumble on Friday that saw it dip to 0.7112 for the first time since Aug. 20.

The World Health Organization said on Sunday that it is not yet clear if the new omicron coronavirus variant is more transmissible compared to other variants or if it causes more severe disease.

Health experts from South Africa, where the new variant was first detected, have indicated that the symptoms from the omicron variant have been mild so far, although they also pointed out that their population is relatively young, and that the number of ‘breakthrough’ infections of vaccinated people was significant.

Vaccine makers have indicated that they will be able to reformulate their drugs in pretty short order, and this has prompted traders to unwind a lot of Friday’s sharp moves, which were all the sharper for taking place on a day when liquidity was thin due to the U.S. holiday weekend.

The benchmark 10-year yield jumped as much as 7 basis points to 1.54%, although it currently trades at 1.52%, having plunged 16 basis points on Friday – the steepest since March 2020.

Aside from the news surrounding the omicron variant, “the general environment in FX remains quite supportive for the dollar, as the FOMC minutes and a bunch of good data kept market speculation on faster tapering and earlier tightening alive,” said analysts at ING, in a note. “On top of this, the worsening contagion situation in Europe and risk of fresh containment measures are generating further divergence in policy expectations between the ECB and Fed.”

Several officials from the European Central Bank, including President Christine Lagarde, have speaking duties on Monday, and investors will be looking for clues on the central bank’s thinking ahead of its meeting on Dec. 16. ECB board member Isabel Schnabel said the bank expects inflation to peak this month. Preliminary German inflation data for November are due in the course of the morning.

ECB officials are due to receive new forecasts that are likely to show inflation climbing at a higher rate than expected earlier, but they will also have to weigh up the dangers posed by the pandemic following the return of lockdowns to some parts of Europe and the s well as the discovery of a new omicron variant.

Dollar Rebounds; Traders Reassess Omicron Risks

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

World News

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered...

World News

George Soros and Bill Gates are part of a consortium acquiring a British developer of rapid-testing technology, including for Covid-19 and tropical diseases,...


If you parked your car in one of the thousands of parking spots across Calgary, there’s a good chance you paid the Calgary Parking...

World News

Every gambler has their own way. Some people like playing poker, whereas others enjoy the excitement of rotating the wheel. Some people prefer...

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. Copyright © 2021 Your Morning Voice. All Rights Reserved