Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Up, Buoyed by Omicron Uncertainty

ForexDec 06, 2021 16:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters

By Gina Lee – The dollar was up on Monday morning in Asia, with uncertainty surrounding the omicron COVID-19 variant and expectations of more hot U.S. inflation data increasing the pressure on interest rates.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.16% to 96.270 by 11:28 PM ET (4:28 AM GMT).

The USD/JPY pair edged up 0.17% to 113.

The AUD/USD pair was up 0.30% to 0.7022, with the Reserve Bank of Australia handing down its policy decision on Tuesday. The NZD/USD pair was up 0.28% to 0.6758.

The USD/CNY pair edged down 0.11% to 6.3689, while the GBP/USD pair inched up 0.03% to 1.3236.

The riskier Antipodean currencies led an attempted bounce earlier in the session, helped along by preliminary observations from South Africa suggesting that omicron patients had relatively mild symptoms.

However, ANZ Bank analysts suggested, “perhaps we should be looking for volatility rather than a trend." Volatility gauges for the Australian and New Zealand dollars hit their highest in about eight months on Friday.

Omicron has found its way into around one-third of U.S. states. Although research into the variant continues, an article by the South African Medical Research Council said the majority of COVID-19 patients were admitted for other reasons and were oxygen-dependent.

Treasury markets have also been volatile in recent sessions, with the U.S. yield curve flattening sharply over expectations that the U.S. Federal Reserve will move too quickly to curb inflation and eventually impact long-term economic growth.

Friday’s mixed job report also reinforced views of quicker Fed asset tapering. The consumer price index figure due later in the week is also expected to support the view and give the dollar a boost.

Interest rate futures markets have priced U.S. interest rate hikes around mid-2022, but only reaching as high as around 1.5% in late 2026 and investors remain wary of that changing quickly.

"This is a tough one to reconcile. It suggests the market sees the Fed stopping hiking after five hikes, well short of the Fed's median forecasts," Pepperstone head of research Chris Weston told Reuters.

However, a year-on-year inflation print above 7%, against economists' expectations for 6.7%, could change things. "Inflation with a 7 as the big number would get the dollar higher,” said Weston.

Dollar Up, Buoyed by Omicron Uncertainty

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Harun Ali
Harun Ali Dec 06, 2021 17:49
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
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.
Continue with Google
Sign up with Email