US Dollar Trades Range-bound Ahead of JOLTS Job Openings Report
The US dollar is trading somewhat range-bound under the 96.50 level against other major currencies as markets absorb latest developments that indicate the Omicron variant is not as severe as initially feared, even as the news sends riskier instruments and currencies higher. At the time of writing, the US dollar index DXY is trading around 96.15.
While the news has failed to provide much direction to the greenback, investors are buying into riskier currencies, with the Australian dollar being one of the biggest gainers during the Asian session. AUD/USD has surged to the highest levels seen so far this month after the RBA confirmed that the latest COVID-19 variant would not hurt Australia’s economic recovery.
Investors’ mood towards global financial markets received an additional boost after leading British drug maker GSK stated that its antibody-based COVID-19 therapy formulated in partnership with US-based Vir Biotechnology can effectively protect against all mutations of the Omicron variant. This news brought further cheer to traders, encouraging them to move away from safe haven instruments and towards riskier instruments.
Meanwhile, another leading commodity currency CAD is holding close to the highest levels seen in two weeks against the USD as traders await the BOC’s latest policy decision due later today. The common currency EUR has also registered small gains while the GBP is also experiencing some consolidation around the 1.32 level against the dollar.
The US dollar, however, remains steady even as several of its peers strengthen as investors wait and watch for more drivers of price action. Later today, we could see some volatility in the greenback on the release of JOLTS job openings as a strong report could reinforce expectations that the US economic recovery is progressing well and could encourage the Fed to begin monetary tightening soon.
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