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Dollar Down, Caution Reigns After Hawkish Powell Comments

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Dollar Down, Caution Reigns After Hawkish Powell Comments
© Reuters.

By Gina Lee

Investing.com – The dollar was down on Wednesday morning in Asia. The safe-haven yen held steady, while the risk-sensitive Australian dollar remained near a one-year low after signaled quicker asset tapering even as risks from the omicron COVID-19 variant remain.

The that tracks the greenback against a basket of other currencies inched down 0.07% to 95.935 by 11:35 PM ET (4:35 AM GMT).

The pair was up 0.30% to 113.46.

The pair was up 0.61% to 0.7167 and the pair was up 0.51% to 0.6856.

The pair inched down 0.02% to 6.3626, with China’s for November, released earlier in the day, at 49.9.

The pair edged up 0.18% to 1.3319.

As research into current vaccines’ efficacy against the latest variant of COVID-19 continues, some investors are worried that hasty monetary tightening could impact the global economic recovery.

“Investors are staying cautious. It’s very difficult to make a judgment about the impact of omicron when we don’t have a lot of information,” Bank of America-Merrill Lynch chief Japan FX strategist Shusuke Yamada told Reuters.

Moderna Inc. (NASDAQ:) CEO Stéphane Bancel said existing COVID-19 vaccines would be less effective against omicron. However, BioNTech SE’s (F:) chief executive Uğur Şahin struck a more cautiously positive note, saying its vaccine developed with Pfizer Inc. (NYSE:) would likely offer strong protection against severe disease from omicron.

Powell testified before the Senate Banking Committee hearing alongside U.S. Treasury Secretary Janet Yellen on Tuesday. In his testimony, he said that the Fed will discuss whether to wrap up asset tapering a few months earlier than scheduled when it meets later in the month.

Although Powell finally veered away from describing high inflation as “transitory”, he was confident that omicron’s impact would be less severe than when the COVID-19 pandemic erupted in 2020.

Investors responded to Powell’s comments by winding up interest rate hike expectations.

Powell and Yellen will testify before the House Financial Services Committee later in the day.

“Powell’s unexpectedly hawkish tone overnight, essentially asserting that inflation risk has primacy over growth/omicron risks, should leave the dollar index forging ahead,” Westpac analysts said in a note. The note also recommended buying dips in the index down to the mid-95 level.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Forex

Dollar Becalmed After Falling in Response to Omicron Hopes

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Dollar Becalmed After Falling in Response to Omicron Hopes
© Reuters.

By Geoffrey Smith 

Investing.com — The dollar was flat in early trading in Europe on Friday, on course to end the week lower after encouraging signs from the pandemic revived global risk appetite, supporting higher yielders. 

By 3:30 AM ET (0830 GMT) the , which tracks the greenback against a basket of half a dozen advanced economy countries, was effectively unchanged at 96.06. Moves in all the major currencies were also minor. The euro was up less than 0.1% at $1.1347 and the pound was up a similar amount at $1.3412.

However, the dollar has lost between 1% and 1.5% this week against and the , and dollars, and nearly 1% against the , as scientific data has dribbled out suggesting that the latest wave of the pandemic will be less economically damaging than previous ones. The only notable gains it has made have been against other haven currencies, such as the and the . 

Data released on Thursday that showed sustained inflationary pressure in the U.S. weren’t enough to upset the broader optimism as a growing body of evidence suggested that the Omicron variant of Covid-19 is less likely than all previous dominant strains to lead to serious illness. The more evidence goes in that direction, the less likely disruptions to economic life will become. 

Trading has now all but stopped ahead of the Christmas holiday period, but markets remain at least formally open.

As has been the case all week, the sharpest moves are in the , whose rally in response to President Recep Tayyip Erdogan’s attempts to stop dollar hoarding now appears to be running out of steam. From a high of over 18 lira last week, the dollar fell as low as 10.1565 on Thursday before starting to gain ground again. By 3:30 AM ET, it traded at 11.6279, up 3.6% on the day.

The was testing its highest level in over a month after news suggesting that talks with the U.S. to de-escalate the situation on the Ukrainian border may take place in the near future. President Vladimir Putin slightly dialed down the tension at his annual press conference on Thursday, declining to repeat a threat of military action that he had made in a speech earlier in the week.

The also strengthened after fresh data showing that the first country to identify the Omicron variant of Covid-19 may soon put its latest infection wave behind it. The 7-day average for new infections is already down by around a quarter from its peak last week. 

 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex

Dollar Down as Fading Omicron Fears Boost Investor Risk Appetite

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Dollar Down as Fading Omicron Fears Boost Investor Risk Appetite
© Reuters.

By Gina Lee

Investing.com – The dollar was down on Friday morning in Asia, with investors towards riskier assets as fears of the omicron COVID-19 variant’s virulence continue to fade.

The that tracks the greenback against a basket of other currencies inched down 0.02% to 96.035 by 10:52 PM ET (3:52 AM GMT).

The pair inched down 0.03% to 114.35, with Japan’s cabinet approving a for the year starting in April 2022. According to the country’s Finance Ministry, Japan plans JPY107.6 trillion yen ($941.26 billion) in overall spending for the year ending March 2023, a 0.9% increase from the current year’s initial budget.

Meanwhile, data released earlier in the day showed that Japan’s grew 0.5% year-on-year in November.

The pair edged down 0.13% to 0.7232 and the pair edged down 0.14% to 0.6815.

The pair inched up 0.01% to 6.3702, with the People’s Bank of China setting a weaker-than-forecast yuan fixing, at 6.3692 per dollar, for a record 15th day on Friday. This is the longest period of lower-than-expected yuan fixings since surveys began in 2018, based on instances when the rate is even a fraction below the estimate.

The pair inched up 0.03% to 1.3409.

Volumes were thin ahead of the holidays, with U.S. markets closed and other markets, such as Hong Kong, ending the trading day early.

Investors cheered the U.S. Food and Drug Administration’s emergency use approval for Molnupiravir, Merck & Co . Inc.’s (NYSE:) COVID-19 pill, on Thursday.

A U.K. study that said omicron infections are less likely to lead to hospitalization also boosted sentiment. However, the study added that the variant may still produce a substantial number of serious cases due to its infectiousness.

Meanwhile, a laboratory study showed that two doses and a booster of Sinovac Biotech Ltd.’s vaccine did not produce sufficient levels of neutralizing antibodies to protect against omicron.

Elsewhere in Asia Pacific, authorities locked down the western Chinese city of Xi’an, the biggest such move since the pandemic started in early 2020. The city’s 13 million residents were told to remain in their homes and to designate one person to go out every other day for necessities, in a bid to curb China’s latest COVID-19 outbreak.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex

Singapore central bank $60 billion swap facility with Fed to expire on Dec. 31

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Singapore central bank $60 billion swap facility with Fed to expire on Dec. 31
© Reuters. FILE PHOTO: A view of the Monetary Authority of Singapore’s headquarters in Singapore June 28, 2017. Picture taken June 28, 2017. REUTERS/Darren Whiteside/File Photo

SINGAPORE (Reuters) – Singapore central bank said on Friday its $60 billion swap arrangement with the U.S. Federal Reserve will expire on Dec. 31, as U.S. dollar funding conditions in Singapore and the region have normalised and continue to be stable.

The facility launched in March 2020 provided $24.6 billion to local, regional and international banks in the midst of the COVID-19 crisis, the Monetary Authority of Singapore (MAS) said.

“MAS continues to remain vigilant to USD funding conditions in Singapore and will be prepared to take action in the event of severe strains in the USD funding market,” it said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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