Three injections of the BioNTech-Pfizer vaccine were able to neutralize the Omicron variant of the corona virus in a laboratory test.
The movement in the major currency pairs today (9/December) is relatively minimal. The risk-on-risk-off turmoil subsided as more information was gathered about the Omicron variant of COVID-19. The US dollar index (DXY) is supported at around 96.00 ahead of the FOMC meeting next week; while the Aussie, Kiwi and Euro's continued rebound attempts were temporarily held back due to a lack of catalysts.
The market has been turbulent since late November due to the discovery of the COVID-19 variant of the Omicron in Africa. Market participants flocked to "refuge" to safe haven assets, because initial information stated that this variant may be more contagious and dangerous than other COVID-19 variants. However, these concerns turned out to be overblown. The new information that emerged this week eased the turmoil, so that high risk currencies rebounded.
Yesterday's statement by BioNTech and Pfizer further calmed the market. This COVID-19 vaccine manufacturer announced that three injections of their homemade vaccine were able to neutralize the Omicron variant of the corona virus in a laboratory test. In other words, the public may just need to add a booster vaccine to prevent the spread of Omicron.
Apart from that, the government policies of several countries to cope with the new wave of COVID-19 have brought down their currency exchange rates. GBP/USD fell to a one-year low at 1.3200, after PM Boris Johnson tightened social distancing policies in the UK.
The emergence of new COVID-19 variants one after another can also make it difficult for central banks to make decisions going forward. Market participants are optimistic that the Fed will accelerate its tapering program at the FOMC meeting next week, but there is also the possibility that they will maintain the policies that have been in effect amid the current uncertainty. As a result, the problem still affects the current exchange rate even though the volatility has subsided.
"The risk the Fed does not announce a faster tapering on December 15 stems mainly from the Omicron variant," analysts at Nomura said in a note quoted by Reuters, "We believe that if concerns over Omicron subside, the market will soon reconsider (monetary) tightening. ) The Fed, probably more than what was calculated before the Omicron news."
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