Commodity News
HeadLine : Currencies recover from Omicron chaos but analysts warn more volatility ahead
Date : Nov 29 2021
Currency markets calmed on Monday in Asia after the initial shock of the discovery of the Omicron coronavirus variant sent investors scurrying for cover last week, but analysts warned of more volatility with little still known about the new strain. The risk-sensitive Australian dollar rose 0.37% to $0.7139, recovering after a 1% tumble on Friday that saw it dip to $0.71125 for the first time since Aug. 20. The safe-haven yen, which had been the biggest beneficiary of the flight to quality, slipped 0.25% to 113.75 per dollar. The Japanese currency surged as much as 2% at one point on Friday to 113.05. The South African rand recovered from Friday’s one-year low at 16.3675 per dollar, jumping 0.93% to 16.1400. South Africa discovered the Omicron variant last week, and countries globally have been quick to tighten border controls with mutations in the spike protein suggesting it could be resistant to current vaccines. Despite the speed of the response, Omicron has since been detected in places including Australia, Britain, Canada, Germany and Hong Kong. The U.S. dollar index - which measures the currency against six major peers - traded at 96.204, after dipping to a one-week low of 95.973 on Friday. While the dollar stands to benefit from the uncertainty because of its status as a safe haven, it clouds the outlook for when the Federal Reserve - and other global central banks - can raise interest rates. 

Source: Reuters
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