Peter Nurse

Investing.com: Tuesday’s dollar decline was due to fresh worries about the effects of the Omicron Coronavirus variant. This prompted an influx into safe havens such as the Japanese yen or the Swiss Franc.

At 02:55 GMT (0755 GMT), Dollar Index, which measures the greenback’s performance against six currencies, fell 0.4% to 95.965, a new low of one week.

fell 0.4% to 113.11, just above Friday’s low of 113.05, while dropped 0.3% to 0.9204, as markets rapidly repriced the risk of interest rate hikes in the U.S.

In prepared testimony ahead of his appearance later in the Senate Banking Committee, Federal Reserve Chair Jerome Powell said the omicron variant of the coronavirus poses risks to both sides of the central bank’s mandate to achieve stable prices and maximum employment.

“The recent rise in COVID-19 cases and the emergence of the omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell said in prepared testimony released Monday. “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.” 

Powell, along with Janet Yellen (the Treasury chief), will probably flesh out these remarks later.

Elsewhere, rose 0.3% to 1.1328, climbed 0.1% to 1.3323, off Friday’s 11-month low of 1.3278, while the risk-sensitive fell 0.3% to 0.7118, just above a 12-month low, and the dropped 0.2% to 0.6807.

This unexpected surge of risk aversion was triggered by comments made by the chief of drugmaker Moderna (NASDAQ:), One of the major pharmaceutical companies that supplies most developed countries with vaccines against the Covid-19 virus. There were concerns about the potential for more global economic disruption if the omicron variant of the Covid-19 virus is discovered. 

Stephane Bancel told the Financial Times that the existing vaccines would struggle to cope with the omicron variant, predicting a ‘material drop’ in their effectiveness.

The World Health Organization warned that there was a risk of infected surges due to this new variant. Countries across the globe quickly reacted and tightened border controls.

On Monday, President Joe Biden reaffirmed sentiment by saying that the United States will not reimpose lockdowns despite the uncertainty around the omicron-related variant.

The release of November’s number will also be of interest on Tuesday. It is anticipated that it will rise to 4.5% from 4.1% last month.

Elsewhere, fell 0.2% to 6.3723 after China recorded surprise growth in factory activity in November, the first in three months, as its came in at 50.1, higher than the previous month’s 49.2 figure.

The was at 52.3, higher than the previous month’s 52.4 figure.