By Peter Nurse
Investing.com – The dollar fell on Tuesday as new concerns about the impact of the Omicron variant of the coronavirus have caused a flight to safe haven assets such as the Japanese yen and the Swiss franc.
At 8:55 a.m. (CET), the, which tracks the evolution of this currency against a basket of six other major currencies, fell 0.4% to 95.965, new lows for one week.
The pair fell 0.4% to 113.11, just above Friday’s lows of 113.05, and the pair fell 0.3% to 0.9204, as markets quickly revalued risk of interest rate hikes in the United States.
In remarks released before his appearance before the Senate Banking Committee today, Federal Reserve Chairman Jerome Powell has said that the Omicron variant of the coronavirus poses risks to the central bank’s two key tasks: achieving stability in prices and full employment.
“The recent surge in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty around inflation,” Powell says in his statements released on Monday. “Increased concern about the virus could reduce the population’s willingness to work in person, slowing down the progress of the labor market and intensifying supply chain problems.”
Powell is likely to develop these statements this Tuesday in his appearance with the Secretary of the Treasury, Janet Yellen.
On the other hand, the pair rises 0.3% to the level of 1.1328, it points a rise of 0.1% to 1.3323, compared to the 11-month lows recorded on Friday at 1.3278, while the, very sensitive to risk, fell 0.3% to 0.7118, just above 12-month lows, and fell 0.2% to the level of 0.6807.
This sudden outbreak of risk aversion comes after the statements of Stéphane Bancel, director of the drug-manufacturing company Moderna, one of the pharmaceutical companies that supply vaccines to combat the Covid-19 virus to most of the developed world, who raised concerns that the Omicron variant could cause a more widespread global economic disruption.
Bancel told the Financial Times that current vaccines would have difficulty coping with the Omicron variant, and predicted a “considerable decrease” in their efficacy.
The World Health Organization has warned of a “very high” risk of increased infections from the new variant, and countries around the world have reacted quickly by tightening border controls.
President Joe Biden called for calm on Monday stating that the United States would not reimpose the lockdown measures, even in the face of uncertainty surrounding the Omicron variant.
It will also be interesting this Tuesday the publication of November, which is expected to rise to 4.5% annually compared to 4.1% the previous month.
On the other hand, the pair fell 0.2% to 6.3723 after China posted surprising growth in industrial activity in November, the first increase in the last three months, as its stood at 50.1 points, above the figure of 49.2 for the previous month.
The rose to 52.3 points, up from 52.4 the previous month.