Haven currency falls on omicron concerns

As Asian traders eased concerns about the Omicron variant, risky currencies against the dollar on Wednesday rebounded from recent lows, and safe havens like the yen fell against the dollar. The Chinese yuan, an indicator of turbulent daily resilience, reached a six-month high of $ 6.3596 in the afterglow of production data, which was higher than expected in November. The Australian and New Zealand dollars also rose 0.5%, rising from their annual lows. Australia finally bought $ 0.7166 and Kiwi bought $ 0.6855.

This move will help compensate for the losses seen last week and Tuesday as concerns about the resurgence of COVID19, the pathogenicity and vaccine resistance of new Omicron strains, and the prospect of rising interest rates swirling in financial markets. The Safe Haven Yen and the Swiss Franc each fell about 0.3% against the dollar and continued to fall at other rates. “Gambling for a short period of time wasn’t really a win,” Westpack analyst Sean Kalaw said, assuming policymakers would rescue the market if growth prospects deteriorated.  “But it may take a few weeks to react to the headline,” he added, as investors wait for information on the reaction from Omicron and the central bank. The JPY was finally estimated at 113.48 per dollar and the Swiss franc at 0.9203 per dollar. The euro remained at $ 1.1334 after rising 0.4% on Tuesday.  There is little new clinical news about Omicron, except for the differences with pharmaceutical companies in the effectiveness of the syringe. A harsh evaluation by Moderna’s CEO on Tuesday pushed up the dollar and yen the day before.

The United States, Hong Kong, and Japan are the last countries to introduce stricter testing or border rules in an attempt to contain newly discovered variants.

The end of US crisis-level interest rates amid Omicron’s uncertainty and soaring COVID 19 incidents in Europe,  following restrictive comments from Federal Reserve Chairman Jerome Powell. It keeps appearing overnight. The $ index showed the largest monthly rise since June in November, believing that inflation could raise US interest rates  sooner or later.

Short-term bonds after Powell advises legislators that it is time to soar again and Powell withdraws the explanation of price pressure as temporary and policymakers will discuss expanding it sooner. And interest rate futures were hit by a decline.

“For the dollar, the kneeling response to the more restrictive Fed is likely to be strength, but I suspect it will continue if growth threats emerge,” he added. The federal funds futures recently showed that there will be at least two rate hikes next year, first likely in June.