⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

US Dollar's Safe Haven Status Dented, Investors Move to Riskier Currencies

US Dollar’s Safe Haven Status Dented, Investors Move to Riskier Currencies

Posted Thursday, December 9, 2021 by
Aiswarya Gopan • 1 min read

After several days of bullishness, the US dollar is exhibiting signs of weakness in early trading on Thursday as its safe haven appeal takes a beating over receding fears about the Omicron variant of COVID-19. At the time of writing, the US dollar index DXY is trading around 96.05.

The news that the Omicron variant may not be as dangerous as initially feared has dented the appeal for the greenback and brought back the risk appetite in global financial markets. As a result, the common currency has gained 0.7% against the US dollar during the previous session while the Australian dollar holds close to the highest levels seen in a week.

The market sentiment received an additional boost after BioNTech and Pfizer announced that their COVID-19 vaccine could neutralize the new Omicron variant during lab tests. This has raised the possibility that booster shots of the vaccine could offer adequate protection against the latest variant, further dimming expectations that countries would reimpose lockdowns and restrictions in response to the latest variant of the virus.

GBP/USD

However, GBP/USD is trading bearish after falling to the lowest levels seen since a year during the previous session. The British government imposed stricter restrictions, urging people to work from home, wear masks in public places and carry vaccination certificates, a move that could hamper economic recovery from the pandemic.

The US dollar could also experience cautious moves ahead of next week’s Fed policy meeting. In case the US central bank announces measures to speed up its process of tapering monthly asset purchases, investor confidence in the greenback could be lifted, bringing back buyers once again.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments