Title: Dollar Rebounds; Traders Reassess Omicron Risks
Nov 29, 2021, 03:09AM ET
The dollar traded higher on Monday, boosted by higher U.S. government bond yields, as traders said Friday's sharp moves following the discovery of the Omicron coronavirus variant were overdone.
At 2:55 AM ET (0755 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was trading 0.2% higher at 96.310 after falling to a one-week low of 95.973 on Friday.
The USD/JPY rose 0.1% to 113.42 after the yen, which had benefited most from Friday's flight to quality, gained as much as 2% to fall to 113.05.
EUR/USD fell 0.4% to 1.1271, while GBP/USD eased 0.1% to 1.3329, recovering from Friday's 11-month low of 1.3278, while risk-sensitive AUD/USD rose 0.3% to 0.7147 after falling 1% on Friday to trade at 0.7112 for the first time since August 20.
The World Health Organization said Sunday it is not yet clear whether the new Omicron coronavirus variant is transmissible compared with other variants or whether it causes more severe disease.
Health experts from South Africa, where the new variant was first detected, said symptoms of the Omicron variant have been mild so far, but pointed out that the country's population is relatively young and that the number of "breakthrough infections" among vaccinated people has been significant.
Vaccine makers have indicated that they will be able to reformulate their drugs in short order, and this has prompted traders to reverse much of Friday's sharp price moves, which were all the stronger for occurring on a day when liquidity was low due to the U.S. holiday weekend.