By Gina Lee

Investing.com – The dollar was down on Wednesday morning in Asia. Although the safe-haven currency the Japanese yen held steady and the risk-sensitive Australian dollars remained at a near one-year high, after the Australian authorities signaled faster asset tapering, despite continuing risks from the micron COVID-19 variant.

By 11:35 ET (11:35 GMT), the that monitors the greenback against other currencies had dropped 0.07%, to 95.935 (4:35 GMT).

This pair rose 0.30% from 113.46 to 113.46.

Both the pair and individual were up 0.6% to 0.7167, while their combined value was 0.6856.

The pair inched down 0.02% to 6.3626, with China’s for November, released earlier in the day, at 49.9.

This pair gained 0.18%, or 1.3319.

As research into current vaccines’ efficacy against the latest variant of COVID-19 continues, some investors are worried that hasty monetary tightening could impact the global economic recovery.

Investors remain cautious. Shusuke Yamada (Bank of America Merrill Lynch Japan FX strategist) said that it is difficult to assess the impact of omicron without a lot of information.

Moderna Inc. (NASDAQ:) CEO Stéphane Bancel said existing COVID-19 vaccines would be less effective against omicron. However, BioNTech SE’s (F:) chief executive Uğur Şahin struck a more cautiously positive note, saying its vaccine developed with Pfizer Inc. (NYSE 🙂 will likely provide strong protection against serious disease caused by omicron.

On Tuesday, Powell and Janet Yellen, U.S. Treasury Secretary, testified in front of the Senate Banking Committee. He stated that Fed officials will be discussing whether asset taper should be stopped a few more months before the scheduled meeting. This was in addition to Janet Yellen, U.S. Treasury Secretary.

Although Powell finally veered away from describing high inflation as “transitory”, he was confident that omicron’s impact would be less severe than when the COVID-19 pandemic erupted in 2020.

Investors responded to Powell’s comments by winding up interest rate hike expectations.

Powell and Yellen will be testifying before the House Financial Services Committee in the latter part of the day.

Analysts at Westpac stated in a note that Powell’s uncharacteristically hawkish tone over the overnight should cause inflation risk to have primacy over growth/omicron threats. This could lead to the dollar index continuing its climb.” In the note, Westpac recommended that dips in the index be bought down to mid-95.