Dollar Down, Yen Near Seven-Week High As Omicron Continues To Spread

  • Posted on December 02, 2021
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  • By FC Team
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Investing.com – The dollar was down on Thursday morning in Asia while the yen, a fellow safe-haven asset, remained near a seven-week high. The South African rand and other riskier currencies were also impacted by concerns over the new omicron COVID-19 variant and its rapid global spread.The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.06% to 95.968 by 11:03 PM ET (4:03 AM GMT). The index consolidated in the middle of its range over the past two weeks, after rising as high as 96.938 for the first time since July 2020 during that period.The USD/JPY pair was up 0.28% to 113.07.The AUD/USD pair edged up 0.15% to 0.7115 and the NZD/USD pair was up 0.23% to 0.6823.The USD/CNY pair inched up 0.03% to 6.3693 and the GBP/USD pair edged up 0.16% to 1.3298.The dollar remained closed to Tuesday's low of 112.535 against the yen, a level not seen since Oct. 11. It was off 0.12% against the South African rand after a more-than-1% surge during the previous session.Markets were rattled by the news that omicron could be more contagious than previous variants, which indicated a return to travel banks and lockdowns that could impact the economic recovery. The U.S. reported its first case of the variant on Wednesday, as Australia, the U.K., Canada, and Japan, also reported cases despite tightened borders.Meanwhile, the number of omicron cases in South Africa, where the variant was discovered four weeks ago, doubled from Tuesday to Wednesday.Despite the uncertainty surrounding omicron and its impact, U.S. Federal Reserve Chairman Jerome Powell reiterated his stance that the Fed will consider speeding up asset tapering when it meets from Dec. 14 to 15. This could also mean a quicker-than-expected interest rate hike."If nothing else, Powell's repeat testimony tells you he is not in the least unhappy about how markets have interpreted what he said earlier," National Australia Bank (OTC:NABZY) head of FX strategy Ray Attrill said in a note."The truth is we are less than a week into the two-to-three-week timeframe that anyone worth listening to, epidemiologists, not market analysts, say is necessary before an informed judgment can be made with respect both to the seriousness of this COVID-19 variant and the efficacy of existing vaccines,” the note added.

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