The Euro, Australian dollar and other major currencies rebounded against the US dollar as market sentiment turned more positive on the economic outlook on Wednesday despite the Omicron variant case soaring and investors were on high alert for more price volatility.
The Turkish lira is seen stabilizing and maintaining its gains recently after its value plummeted. The strengthening was driven by President Tayyip Erdogan’s new move to control Turkish reserves from volatility.
Foreign exchange movements were largely small, with trading volumes thinner ahead of the holiday season.
The Euro was seen weak at the beginning of the session before strengthening by 0.33% to a trading level of 1.1319 against the US dollar. The Australian dollar initially lost 0.4%, declined to $ 0.7121 then strengthened 0.50% against the US dollar. The same goes for the NZD. This was supported by improving risk sentiment as oil and global stocks rose.
Sterling however gained 0.50% to $ 1.3316, although data showed the British economy grew slower than expected.
However, the US dollar index, which measures the US dollar against six major currencies, traded down 0.30% to 96.210.
According to currency analysts, usually the market will face low volatility by Christmas. Yet this year, the market is facing contagion sentiment of the Omicron variant that is likely to force the government to impose sanctions.
The spread of Omicron variants continues to present challenges to market players with infections on the rise across Europe, the United States and Asia, causing countries around the world to consider new restrictions on movement and re-impose quarantine periods for incoming visitors.
