Omicron Variant and its Impact on U.S. Dollar

Omicron Variant and its Impact on U.S. Dollar

The U.S. dollar is the powerful currency in the world, so investors, as well as analysts, are constantly monitoring it. The U.S. currency rose on Tuesday morning in Asia as concerns regarding the Omicron Covid-19 variant started receding. 

In fact, The U.S. dollar index that tracks U.S. currency against a basket of other currencies dropped 0.09% to 96.245. 

The USD/JPY pair gained 0.19% to 113.68. 

The AUD/USD pair added 0.37% to 0.7075. The Reserve Bank of Australia decided not to change its interest rate. The NZD/USD pair advanced 0.19% to 0.6763. 

The USD/CNY pair fell 0.07% to 6.3712. The world’s largest economy remained the country’s third-largest trade partner in November, with the bilateral trade value reaching $72 billion for the month. The total trade between the two largest economies reached $682.31, a year-on-year increase of 30.2%. Nevertheless, the growth rate of the bilateral trade dropped from 35.4% in September to 33.4% in October.

 The GBP/USD advanced 0.15% to 1.3284.

 

Dollar and risk factors

Investors, as well as analysts, are processing the information regarding the Omicron variant. Ntsakisi Maluleke from South Africa commented on the Omicron variant. He works as a public health specialist in South Africa’s Gauteng Province. Ntsakisi Maluleke stated that over the weekend, patients with Omicron experienced only mild symptoms.

 In the meantime, China eased its monetary policy by reducing banks’ reserve requirements for the second time this year. The country’s central bank will reduce most banks’ reserve requirement ratio by 0.5 percentage points next week. 

On Wednesday, the Reserve Bank of India will hand down its policy decision. Several critical central banks will all hand down their policy decisions in the following week.

 

In November, the Reserve Bank of New Zealand increased its interest rate to 0.75%. Some investors believe that the move was bad for growth.