The US dollar today traded steady by showing not much volatility in the market with the market starting to dare to take risks. Even so Euro-US dollar trading remains showing volatility as markets have already begun to consider hawkish comments from the Fed and the risks associated with the Omicron variant.
The US dollar index, which measures the greenback, did not change much and is currently trading down 0.21% to a trading level of 95.775.
At the same time, global stock markets and risky currencies have begun to record a recovery from previous session losses as the market expects that the contagion of the Omicron variant will not affect the economic recovery. However, volatility in the currency market remained high especially in the euro.
ING strategists noted that the euro-us dollar volatility due to the Omicron variant was seen as positive to the euro as it could slow the Fed’s tightening. While Powell’s statement (inflation is the Fed’s main concern) is seen as negative for the euro.
The Euro strengthened by 0.05% against the US dollar by trading at 1.1339.
On Tuesday yesterday, the market was shocked by comments from Moderna stating that the existing vaccine is likely to be ineffective against the Omicron variant compared to other variants causing market players to switch to less risky assets.
On the other hand, BioNTech’s chief executive noted that the vaccine they released in collaboration with Pfizer is likely to be effective for the Omicron variant.
