Tags: Forex Market
Yen skids to a four-year low, dollar

Dollar increases on virus risk

The dollar traded higher Monday, supported by higher U.S. Treasury yields as traders viewed Friday’s sharp moves on finding the omicron COVID-19 variant as overdone.

At 2:55 AM ET (0755 GMT), the Dollar Index, which follows the dollar versus a basket of six other currencies, traded 0.2% more high-priced at 96.310, following dipping to a one-week low 95.973 on Friday.

USD/JPY increased 0.1% to 113.42, following the yen, which had been the largest beneficiary of Friday’s flight to quality, rose as much as 2% on Friday, with the pair falling to 113.05.

EUR/USD declined 0.4% to 1.1271, while GBP/USD sank 0.1% to 1.3329, off Friday’s 11-month low of 1.3278. In comparison, the risk-sensitive AUD/USD climbed 0.3% to 0.7147, increasing following a 1% tumble on Friday that marked its dip to 0.7112 for the first time after Aug. 20.

 

WHO not sure on the new variant

On Sunday, the World Health Organization stated that it is not transparent if the new omicron coronavirus variant is more transmissible than different variants or causes more acute disease.

Health specialists from South Africa, where the new variant was first discovered, have indicated that the symptoms from the omicron variant have been mild so far. Nevertheless, they also noted that their population is comparatively young. The number of ‘breakthrough’ infections of vaccinated people was notable.

Vaccine makers had registered that they would be ready to reformulate their drugs in pretty short order. This had driven traders to untwist a lot of Friday’s sharp moves, which were all the more visible for taking place on a day when liquidity was thin because of the U.S. holiday weekend.

The benchmark 10-year yield surged as much as 7 basis points to 1.54%. However, it presently trades at 1.52%, falling 16 basis points on Friday – the most precipitous after March 2020. 

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