Antipodeans battle to stem Omicron slide; cryptos lick weekend wounds

Economy 1 hour ago (Dec 05, 2021 08:15PM ET)

2/2 © Reuters. FILE PHOTO: A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011. REUTERS/Kacper Pempel 2/2

By Tom Westbrook

SYDNEY (Reuters) - Riskier currencies fought for a foothold on Monday against a dollar, buoyed by uncertainty around the Omicron variant and the expectation of more hot U.S. inflation data putting upward pressure on interest rates.

Cryptocurrencies nursed big losses from a wild weekend that at one stage crushed bitcoin more than 20%. Bitcoin found support around $49,000 on Monday.

Also smarting from a big drop, the Antipodeans led an attempted bounce in early Asia trade as the mood was helped by preliminary observations from South Africa suggesting Omicron patients had relatively mild symptoms.

The Aussie rose 0.3% to $0.7016, scraping itself up from a 13-month low. The kiwi rose 0.1% to $0.6750.

The safe haven yen also eased 0.1% on Monday to 113.00 per dollar with the cautiously brighter mood, though analysts expect a bumpy ride ahead with trade most likely sensitive to Omicron news and U.S. inflation data on Friday.

The euro was last stable at $1.1303 and sterling steadied at $1.3232.

"Perhaps we should be looking for volatility rather than a trend," said analysts at ANZ Bank. Volatility gauges for the battered Aussie and kiwi on Friday hit their highest in about eight months as two currencies sank. [AUD/]

Fairly little is known about Omicron, now found in about 1/3 of U.S. states, with cases also detected in Europe, Asia and Southern Africa.

An article by the South African Medical Research Council based on early observations in Pretoria said the majority of COVID-19 patients had other reasons for admission and weren't oxygen dependent - a better picture than previous virus waves.

Gyrations in the Treasury market have also unnerved traders in recent sessions as U.S. yield curve has flattened sharply on an expectation that the Federal Reserve moves soon to quell inflation and ends up curbing long-term growth.

A mixed U.S. jobs report last week did little to shake market expectations of a more aggressive tightening and the consumer price report due on Friday looms as another the case for an early tapering and gave support to the dollar.

The U.S. dollar index began the week steady at 96.211, within range of November's 16-month peak of 96.938.

Interest rate futures markets have priced U.S. rates lifting off around the middle of next year, but only reaching as high as around 1.5% even as far out as late 2026 and traders are wary of that changing quickly.

"This is a tough one to reconcile," said Chris Weston, head of research at broker Pepperstone. "It suggests the market sees the Fed stopping hiking after five hikes, well short of the Fed's median forecasts."

Weston said that a year-on-year inflation print above 7% - against economists' expectations for 6.7% - could shake things up.

"Inflation with a 7 as the big number would get the USD higher," he said.========================================================

Currency bid prices at 0033 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.1299 $1.1311 -0.08% -7.51% +1.1327 +1.1299

Dollar/Yen

112.9150 112.8500 +0.12% +9.38% +113.0550 +112.9800

Euro/Yen

127.59 127.55 +0.03% +0.53% +127.8200 +127.5600

Dollar/Swiss

0.9191 0.9177 +0.15% +3.88% +0.9191 +0.9183

Sterling/Dollar

1.3229 1.3232 +0.01% -3.14% +1.3240 +1.3228

Dollar/Canadian

1.2840 1.2847 -0.06% +0.82% +1.2840 +1.2817

Aussie/Dollar

0.7008 0.7001 +0.14% -8.87% +0.7020 +0.6995

NZ

Dollar/Dollar 0.6746 0.6748 +0.05% -5.98% +0.6758 +0.6751

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

Antipodeans battle to stem Omicron slide; cryptos lick weekend wounds

Related Articles

'Extreme' vaccine discrimination risks leaving Africa behind - report By Reuters - Dec 05, 2021

By Tommy Wilkes LONDON (Reuters) - Africa has little chance of overcoming the COVID-19 pandemic unless 70% of its population is vaccinated by end-2022, yet "extreme vaccine...

Bahrain central bank plans to offer digital Dinar - Sky News Arabia By Reuters - Dec 05, 2021

DUBAI (Reuters) - The Central Bank of Bahrain plans to offer a digital Dinar through a digital payments platform which will be available around the clock, Sky News Arabia reported...

Iran currency falls as nuclear talks seem to hit roadblock By Reuters - Dec 04, 2021

DUBAI (Reuters) - The Iranian rial currency dipped on Saturday but remained above historic lows after news that talks with world powers to revive the 2015 Iran nuclear accord may...

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.

December 06, 2021 at 01:15PM
Reuters
https://ift.tt/3dl7M3A