ForexLive European FX news wrap: Risk bounces as omicron fears cast aside for now

Forex news from the European trading session - 1 December 2021

Headlines:

Markets:

• AUD leads, CHF lags on the day
• European equities higher; S&P 500 futures up 1.3%
• US 10-year yields up 3.7 bps to 1.478%
• Gold up 0.7% to $1,785.90
• WTI up 4.5% to $69.18
• Bitcoin up 0.2% to $57,250

It was a positive session for risk trades as the market brushed aside worries on the omicron variant, after having seen a more hawkish take by Fed chair Powell yesterday.

Despite stocks suffering a drop on rate hike fears yesterday, Powell's nonchalant approach in viewing the omicron variant is perhaps helping to keep markets more sanguine today with equities bouncing back and bond yields climbing as well.

European indices started off with modest gains before pushing up to around 1.2% to 1.8% while US futures gradually crept higher to stick around gains of over 1%.

That is helping to see commodity currencies keep more buoyed even if gains were not stretching all too much against the dollar, with the greenback also arguably finding some support from Powell's hawkishness in trading yesterday.

EUR/USD moved lower from 1.1335 to near 1.1300 while USD/JPY stuck with gains around 113.30-50 levels for the most part on the session.

Meanwhile, USD/CAD is down slightly around 1.2740-50 levels while AUD/USD and NZD/USD are building on a bounce from the August lows yesterday as both pairs have erased their post-Powell drop for the most part.

AUD/USD traded up to a high of 0.7170 before sticking around 0.7130-40 levels while NZD/USD climbed to a high of 0.6860 before sticking around 0.6830 levels now.

Elsewhere, oil was a notable gainer after suffering its worst month this year in November. WTI is up over 4% on the day to above $69 as bargain hunters swoop in before the focus switches to OPEC+ in the next few days.

December 02, 2021 at 01:07AM
Justin Low
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