Kevin Buckland, Tom Westbrook

SYDNEY, (Reuters) – Riskier currencies rebounded from their recent lows. Safe-havens like the yen were able to ease against the dollar Wednesday as Asian traders eased some concerns about Omicron.

As it basks in better-than expected manufacturing data, the, which has been a symbol of strength in turbulent days, reached a six month high of 6.3596 dollars. [CNY/]

Also, the Australian and New Zealand Dollars saw 0.5% gains. This helped them to rebound from their one-year lows. In the end, they bought 0.7166 and $0.6855. [AUD/]

These moves are part of a broader effort to recover losses last week and Tuesday. Financial markets remain concerned about COVID-19’s resurgence, Omicron strain’s virulence as well as the possibility of higher interest rates.

Each safe-haven currency, the yen or Swiss franc lost 0.3% to the dollar. Other crosses fell even further.

“It’s not really a winning trade for being playing for risk off over a longer period really,” stated Westpac analyst Sean Callow. This is due to the assumption by Westpac that policymakers will come to the rescue of markets if growth prospects dimen.

“But it might be a very skittish couple weeks of responding, to headlines,” said he. Investors are waiting for Omicron information and central bankers’ response.

Last week, the yen traded at $1.11348 per dollar while the franc was at $0.9203 per USD. After a Tuesday 0.4% increase, the euro remained at $1.1334.

Omicron has not received any clinical updates, except for differing views from drugmakers about the efficacy and safety of their drugs. An unfavorable assessment by Moderna (NASDAQ) On Tuesday, the CEO of NASDAQ had driven both dollar and yen higher than they were a day before.

Japan, the United States and Hong Kong are among the countries that have flagged tougher border regulations or testing to contain this newly detected variant.

Sterling held steady at $1.3324 while the Canadian Dollar bounced back with oil prices, rising about 0.4%.

BIG DOLLAR

The Federal Reserve Chair Jerome Powell’s overnight hawkish remarks made against the background of Omicron uncertainty, rising COVID-19 case numbers in Europe, make the prospect of the United States ending crisis-level interest rate levels even more gloomy.

Already, the index saw its largest monthly increase since June and November. This was due to inflation fears that could lead to higher U.S. rates sooner than expected.

The stock jumped again briefly after Powell informed lawmakers that he was retiring his statement about price pressures being temporary and suggested that policymakers might consider a quicker taper.

Steve Englander of Standard Chartered’s FX Research in New York, stated that his references to bringing forward the tapering schedule by a few more months sounded like he thinks (it would close in) March/April rather than May/ June.

His comments included that the dollar’s knee-jerk reaction against a Fed more hawkish is likely to be strength. However, we remain skeptical about whether this trend will last if growth concerns emerge.”

Fed funds futures showed that at least two rate increases were priced into next year. The first was likely to be in June.

Emerging markets Powell’s abrupt shift in interest rates and a more stubborn refusal to change sent Powell further into the abyss.

Powell will continue his testimony later in the day on Wednesday. Other highlights include German retail sales data at 0700 GMT, and U.S. Private payrolls due at 1315 GMT.

The resilience of cryptocurrencies has been remarkable despite volatile sessions. On Wednesday, bitcoin was steady at $56,900.