The dollar fell as Omicron left currency markets volatile

On Wednesday, the dollar fell again in Asia, starting a third straight session under pressure as investors preferred riskier currencies.

On Tuesday, the New Zealand dollar increased 0.9%, which ranked as its best day since the beginning of October, recovering from a low to last trade at $0.6758. The pound earned 0.47% on its best day in a month, the last trading at $1.3268. The dollar also gained 0.45% on the safe-haven yen.

The dollar index was last at 96.442, down from as high as 96.995 the previous week when it tested a 15 month high.

Market players and even experts struggled to point to an apparent reason for the ongoing risky situation in the market. Markets struggled to assess the outcomes of the new Omicron variant, leading to high volatility.

Overview

On Monday, stocks sold off quickly, while the dollar index gained 0.9% on Friday.

Analysts at ING said that while the weeks before Christmas usually show to be low in volatility for currencies and various other asset classes, this year seems different. This year there will be a clear mix of seasonal tendencies, with the omicron variant threatening to push new restrictions. At the same time, markets are still processing a week full of critical central bank decisions. Last week Britain was the first to raise interest rates since the pandemic’s beginning. The U.S. Federal Reserve also signaled plans to tighten interest rates next year.

Omicron infections are spreading quickly in the U.S., Europe, and Asia, forcing countries worldwide to consider new restrictions on movement and imposing quarantines for incoming visitors again.

The euro was last at $1.1288, which would be its third straight session of earnings. Bitcoin was steady below $48,000 after a 5% gain, while Ether also gained and was above $4,000 this week.