The US dollar weakened after the development of the latest Omicron infection was considered not to trigger a strict lockdown. Risk appetite rose thus pressing the dollar's safe haven.
The US dollar turned down in the trading session on Thursday (30/December) early in the morning. In the midst of a liquidity crunch ahead of the New Year holiday, safe-haven currencies (including the US Dollar and Yen) were hit by a sell-off due to a resurgence of risk appetite. The US Dollar Index slipped 0.26% to 95.90.
The development of the infection of the Omicron variant was a major highlight for investors in a quiet market. Although cases of the Omicron variant of COVID-19 are reported to be increasing in more countries, but the market is relieved that there is no indication of the imposition of a strict and broad lockdown as previously feared.
United States health authorities have even recommended reducing the duration of isolation. US citizens who are positive for COVID-19 without symptoms are now sufficient to isolate for 5 days, shorter than the previous mandatory 10-day isolation policy.
"Omicron variants are still rampant, but fail to significantly influence the market. Even though global cases have crossed one million cases in two days," said analysis from the Saxo Bank team.
This condition is a breath of fresh air for high-risk assets. Commodity currencies such as the Australian Dollar, New Zealand Dollar and Canadian Dollar also outperformed the USD. AUD/USD advanced 0.27% to 0.7248, the highest since November 22; NZD/USD jumps 0.39% to 0.6826; USD/CAD fell 0.23% to 1.2790.
Market In Chopper Situation
In general, the forex market is currently in a choppy trading mode. Given the large number of traders who are taking a break from the market, analysts say it will be difficult to read price movements in the fluctuations that are forming at this time.
"In times like this, we are trading very technically. It's just that some short-term traders are still trying to find their luck at the end of the year," commented Brad Bechtel, Jefferies analyst quoted by Reuters.
Bechtel added, the current forex market flow is still low volume compared to the end of the usual month. However, compared to last week, the current is a bit busier.
