The US dollar weakened to its lowest in a week as risk sentiment rebounded in light of the positive reports regarding the Omicron COVID.
Safe haven The US dollar traded at its lowest level in a week, driven by the optimistic attitude of market participants towards the economic outlook for 2022. At the time of this news release, the Dollar Index (DXY) which measures the strength of the US dollar against six other major currencies was in the range of 96.04, weakened 0.08 percent of the daily Open price.
Investors Ignore Omicron, US Dollar
In yesterday's trading session, the AUD/USD pair even jumped 0.86 percent to touch 0.7220 or the highest level in the past week. A similar increase was also seen in the Canadian Dollar which strengthened two days in a row against the Greenback. However, in the Asian session this morning, the US Dollar started to strengthen because investors were suspected of taking profit-taking. USD/CAD was up 0.09 percent at 1.2844, while the AUD and NZD were down 0.07 percent and 0.04 percent, respectively.
A report from the South African health authorities suggested reducing the share of hospitalizations for Omicron patients compared to patients infected with the Delta variant. This news was greeted positively by market participants who saw that the impact of the Omicron variant might not be as bad as previously thought. In fact, market concerns had spread at the beginning of the week in connection with restrictions in European countries to anticipate a surge in Omicron cases.
Not only from the pandemic issue which began to subside, the recovery in risk sentiment was also supported by last night's US Consumer Confidence data which increased further in December. This implies that the economic growth of Uncle Sam's country will continue to grow in 2022.
"The dollar weakened as the risk-off sentiment receded... We see, the US dollar will continue to move in a flat (consolidation) range for now, given the lack of catalysts ahead of the Christmas and New Year holidays," said Brown Brothers Harriman.
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