FOREX-Antipodeans Struggles to Stop Omicron Slide; cryptos lick weekend wounds
Band Tom Westbrook
SYDNEY, December 6 (Reuters) – Riskier currencies fought against the dollar on Monday, supported by uncertainty around the Omicron variant and the wait for warmer US inflation data to put upward pressure on interest rates.
Cryptocurrencies suffered big losses after a wild weekend that at one point crushed bitcoin BTC = BTSP more than 20%. Bitcoin found support of around $ 49,000 on Monday.
Also cooked by a steep drop, the Antipodes led an attempted rebound in Asian trade early on, as mood was aided by preliminary observations from South Africa suggesting Omicron patients had relatively mild symptoms. .
The australian AUD = D3 rose 0.3% to $ 0.7016, rising from a 13-month low. The kiwi NZD = D3 rose 0.1% to $ 0.6750.
The refuge yen JPY = EBS Also fell 0.1% Monday to 113.00 per dollar with a cautiously more bullish mood, although analysts expect a bumpy ride to come with trade most likely sensitive to Omicron news and data. inflation rate on Friday.
The euro EUR = EBS was last stable at $ 1.1303 and sterling GBP = D3 stabilized at $ 1.3232.
âMaybe we should be looking for volatility rather than a trend,â ANZ Bank analysts said. Volatility gauges for the beaten Australian AUD3MO = and kiwi NZD3MO = On Friday, it hit its highest level in about eight months, as two currencies collapsed. EUR /
Not much is known about Omicron, which is now found in about 1/3 of US states, with cases also detected in Europe, Asia and southern Africa.
A South African Medical Research Council article based on the first observations in Pretoria said the majority of COVID-19 patients had other reasons for admission and were not dependent on oxygen – a better picture than the waves previous viruses.
The gyrations in the Treasury market have also pissed off traders in recent sessions as the US yield curve has flattened sharply, hopes that the Federal Reserve will put downward pressure on inflation and eventually dampen growth. long-term.
A mixed US employment report last week did not shake market expectations of more aggressive tightening, and the consumer price report expected on Friday looms as another argument in favor of an early slowdown and supported the dollar.
The US dollar index = USD started the week stable at 96.211, range from the 16 month peak in November of 96.938.
Interest rate futures markets 0 # FF:, 0 # OF: have priced US rates around the middle of next year, but are only hitting around 1.5% even through the end of 2026 and traders fear that will change quickly.
“It’s hard to reconcile,” said Chris Weston, head of research at brokerage Pepperstone. “This suggests the market is seeing the Fed halt its hikes after five hikes, well below the Fed’s median forecast.”
Weston said year-over-year inflation above 7% – against economists’ expectations of 6.7% – could shake things up.
âInflation with a 7 as a large number would cause the USD to rise,â he said. =================================================== ======
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(Reporting by Tom Westbrook. Editing by Gerry Doyle)
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