Commodity currencies pushed up in hopes of calming Omicron


London — Tuesday’s dollar index is stable and higher risk currencies have risen. This is because traders have bet that the Omicron variant of COVID-19 is not as serious as previously expected.

Asian stocks recovered overnight and oil prices rose as risk appetite improved after reports of Omicron cases showing only mild symptoms, according to a report earlier in the week in South Africa.

On Sunday, Anthony Fauci, chief executive officer of infectious diseases in the United States, told CNN so far that “it doesn’t seem to be that serious.”

“The generally oversold commodity FX segment may be experiencing a big short squeeze as market concerns about Omicron have eased,” ING Strategist wrote in a client note.

The Australian dollar led the rise on Tuesday, rising 0.6% at 0902 GMT after the Reserve Bank of Australia meeting to $ 0.70915, expanding from Monday, the highest rate of increase in seven weeks.

The RBA did not make any policy changes, but said Omicron was not expected to hinder the country’s economic recovery. Analysts also said market speculation about a faster tapering of central bank bond purchases also supports the currency.

“Omicron’s impact will ultimately hold the key to policy direction in the short term, but the RBA does not currently believe that new varieties are likely to truly undermine recovery. It is clearly positioned within the Fed, etc.). Policy planning, “said ING.

“This is a concept that we can continue to support the Australian dollar in the coming weeks as many short positions are still closed.”

The New Zealand dollar was also up 0.1% to $ 0.6764 and the pound sterling was stable at $ 1.3257.

Meanwhile, the dollar index was flat at 96.363, while the safe yen fell about 0.2% against $ 113.705.

China’s developments also contributed to risk-on-tone, as the People’s Bank of China (PBOC) said it would lower the amount of cash banks must hold as reserves. This is the second move this year and is seen as a way to free liquidity to support economic growth.

After the announcement, the yuan was eased both onshore and offshore (because rising liquidity usually hurt the currency), but as traders wanted more supportive measures to stop the slowdown, the yuan. Has recovered.

At 0904 GMT, the yuan rose about 0.1% at 6.3697.

Elsewhere, the euro fell 0.2% to $ 1.1263, but is still hit by expectations that the US Federal Reserve will tighten its policies faster than the dovish European Central Bank.

Germany’s industrial output increased more than expected in October as a rare sign of manufacturing strength, but analysts said the bottleneck in the supply of raw materials and intermediate goods made Europe’s largest economy produce. I warned that it would continue to interfere.

The market is paying attention to Germany’s ZEW Economic sentiment survey scheduled for 1000 GMT.

It also focuses on a video conference between US President Joe Biden and Russian President Vladimir Putin, who will face the toughest economic sanctions to date if Russia invades Ukraine. Is expected.

The Russian ruble set in front of the phone.

After the weekend crash, major cryptocurrencies continued to recover. Bitcoin is up about 1.6% to $ 51,339.5, below last month’s high of $ 69,000.