November 26, 2021

Panic! USD Plunges Sharply In European Session

 The opening session of European markets saw a drastic plunge of the US dollar king following a decline in US bond yields, amid growing concerns over the new Covid-19 variant.

The dollar index jumped to 96.37 from its previous 16-month high of 96.90, benefiting the safe-haven swiss franc and yen to soar.

The yen and swiss franc jumped 1% against the US dollar, with a fall in 10 -year US bond yields to 1.50% gave the yen a big boost.

In addition to being pressured by declining bond yields, the USD was also affected by profit -taking activity ahead of the weekend and the Thanksgiving holiday in the United States.

The euro became the only major currency to stand out in the European session by rising higher as most other currencies fell following the US dollar.

While risk -sensitive currencies, the Aussie dollar and the kiwi continue to be affected by the latest threat from variant B.1.1.529 which is said to be very easy to spread and has various mutations.

Several major countries such as the US, UK, Japan and the European Union (EU) have begun tightening travel restrictions measures from South Africa to curb wider contagion.

Meanwhile, the pound also fell to its latest low this year below 1.3300 following these concerns.

The Canadian dollar plunged to a two-month low, squeezed by an 8-week fall in world crude oil prices following fears the new Covid-19 variant would threaten global fuel demand.