U.S. Dollar Weakens; Yen Rises As Vaccine Fears Dent Risk Appetite
The U.S. dollar dropped against its major counterparts in the
European session on Tuesday, while the Japanese yen climbed, as a
warning from Moderna Chief Executive Officer about the efficacy of
the current vaccines to resist the Omicron coronavirus variant
triggered a sell-off in European shares.
In an interview with the Financial Times, Moderna CEO Stephane
Bancel said that the high number of mutations on the spike protein
and the rapid spread of the variant in South Africa indicated that
the current vaccines may need to be modified next year.
His comments sparked concerns about imposing more restrictions
and lockdowns to counter the spread of Omicron Covid-19
U.S. treasury yields tumbled as investors sought safe-haven
treasuries amid concerns about the economic impact of the
The benchmark yield on the 10-year note fell 1.427 percent.
Yields move inversely to bond prices.
In prepared testimony before the Senate Banking Committee,
Federal Reserve Chair Jerome Powell said that the new strain
clouded the economic outlook and price pressures could last longer
than earlier estimate.
The variant posed downside risks to employment and economic
activity and increased uncertainty for inflation, he added.
The U.S. currency depreciated to a 6-day low of 1.3371 against
the pound and near a 2-week low of 1.1373 against the euro,
following its prior highs of 1.3305 and 1.1284, respectively. The
greenback is seen finding support around 1.35 against the pound and
1.15 against the euro.
The greenback reversed from its early highs of 113.89 against
the yen and 0.9235 against the franc, declining to a 1-1/2-month
low of 112.68 and near a 3-week low of 0.9172, respectively. The
greenback may find support near 110.00 against the yen and 0.90
against the franc.
In contrast, the greenback jumped to 1.2812 against the loonie,
its highest level in more than two months. On the upside, 1.20 is
possibly seen as its next resistance level.
The greenback advanced to more than 1-year highs of 0.7093
against the aussie and 0.6781 against the kiwi in late Asian deals
and held steady thereafter. The greenback had ended yesterday's
trading at 0.7141 against the aussie and 0.6825 against the
The yen held firm against the pound at near a 2-month high of
150.43. The next likely resistance for the currency is seen around
the 148.00 level.
The yen rose to 88.03 against the loonie, its strongest level
since October 6. The currency is likely to find resistance around
the 86.00 level.
The yen edged up to 122.65 against the franc and 127.84 against
the euro, off its early 5-day low of 123.37 and a 4-day low of
128.60, respectively. If the yen rises further, it may find
resistance around 119.00 against the franc and 126.00 against the
The yen held steady against the aussie and the kiwi, after
climbing to near 2-month highs of 80.18 and 76.66, respectively in
late Asian trading. The yen had closed yesterday's deals at 81.06
against the aussie and 77.46 against the kiwi.
Looking ahead, Canada GDP data for the third quarter, U.S.
FHFA's house price index and S&P/Case-Shiller home price index
for September and consumer confidence index for November will be
featured in the New York session.
Federal Reserve Chair Jerome Powell will testify on the CARES
Act, along with Treasury Secretary Janet Yellen before the Senate
Banking Committee in Washington DC at 10:00 am ET.
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