Home Daily Commentaries Dollar up as investors weigh Omicron risk

Dollar up as investors weigh Omicron risk

Daily Currency Update

Demand for the US dollar climbed against a basket of currencies on Monday after investors further weighed the potential effects of the COVID-19 Omicron variant. Several reports said that while the variant can be more transmissible, its symptoms were considered to be mild. The US Dollar Index was sitting around 96.27 at the time of writing. The US dollar was also up 0.49% against the Japanese yen.

Last Friday’s big event was the monthly US jobs report with a mixed bag of numbers produced. The headline non-farm payrolls data fell way short of most estimations, printing 210k vs. the median estimate of 553k jobs being added for November. Usually this would have led to a selloff in the dollar, however accompanying the NFP number was an eye-catching drop in the level of unemployment. This fell further than expected from 4.6% to 4.2% which means it is now back to pre-pandemic levels.

Key Movers

Tuesday’s German ZEW Economic Sentiment survey will be the key release from the Eurozone. We could also see Germany's new coalition government finally formed. EURUSD was trading around 1.12810 at the time of writing.

The pound edged higher against the US dollar on Monday after Bank of England Deputy Governor Ben Broadbent’s speech, in which he said the UK’s tight labor market could add to inflationary pressures. Some analysts considered this as a signal that the central bank could hike rates at its December 16th meeting. GBPUSD was trading at 1.3253 at the time of writing.

The Australian dollar climbed against its US counterpart on Monday morning after last week’s selloff. Relatively upbeat news about the Omicron variant’s milder symptoms has helped the AUD’s recovery. AUDUSD was up 0.64% at around 0.70440 at the time of writing.

Expected Ranges

  • EUR/USD: 1.1271 - 1.1318 ▼
  • GBP/USD: 1.3219 - 1.328 ▲
  • AUD/USD: 0.6995 - 0.7051 ▲
  • USD/CAD: 1.2778 - 1.2843 ▼