The U.S. dollar posted an excellent reading at the opening of the U.S. market on Monday driven by a surge in European equities and government bond yields in the first day of 2022 trading.
The US dollar index, which measures the greenback against six major currencies, traded up 0.62% at 96.2. The market is now facing a surge of positive Covid-19 cases caused by the Omicron variant continuing to disrupt global travel and public services where it could have an impact on the economy.
The yen depreciated against the US dollar at 115.36 per dollar. This reading is the lowest since the end of November. On the other hand, the Euro depreciated 0.53% against the US dollar at 1.1307.
Germany faced supply constraints in manufacturing activity in December. However analysts expect this to be even smoother in 2022. “German producers are optimistic about growth prospects in the coming year, although much is still dependent on an improvement in the supply situation,” said Associate Director of Economics Phil Smith, commenting on the IHS survey Markit PMI Monday.
The market expects the European Central Bank to hold a dovish stance while the U.S. Federal Reserve. and the Bank of England tightened monetary policy.
Sterling was also among those affected by the contagion of the Omicron variant with a 0.65% decline at 1.3440 trading. Although the market is optimistic with economic growth amid the spread of the Omicron variant, concerns over hospital admission congestion remain.
The market now continues to focus on PMI data and the NFP jobs report that will be released this week.
