A change in the market sentiment towards risk-off has driven strength into the US dollar early on Wednesday, helping it rise to multi-month highs against its other leading peers, especially the Euro. At the time of writing, the US dollar index DXY is trading at around 93.07.

While EUR/USD is trading close to the lowest levels seen since last November, GBP/USD has dropped to a three week low as COVID-19 cases continue to increase across the world. Weighing on investor confidence especially is news that New Zealand reported its first set of cases in six months, from the delta variant of the virus.

The risk-off mood in global markets has been further bolstered by the geopolitical crisis unfolding in Afghanistan, where the Taliban is said to have taken over complete control. This has driven a further rush towards the US dollar, which enjoys a safe haven status in times of rising uncertainty.

A weak retail sales figure for the month of July from the US failed to have much of an impact on the greenback, although it did serve to highlight the economic concerns from the spread of the delta variant. According to data released by the US Commerce Department, retail sales declined by 1.1% MoM during July, a month traditionally known for high spending owing to summer holidays.

Later today, the US dollar could experience some volatility on the release of the minutes from July’s FOMC meeting. Investors will closely monitor the data for any clues policymakers share about tapering asset purchases.