Major Currencies Maneuvering To Find Their Way

The US dollar kept advancing on Tuesday, posting the most advance against the Japanese yen. USD/JPY pair jumped to 116.34, its highest since January 2017, as the dollar surged alongside US bond yields. Demand for the US dollar retreated with Wall Street’s opening, as the dollar was ending the day unevenly across the major currencies.

US indexes were mixed, with the DJIA reaching a record high and holding on to gains, but the Nasdaq Composite shedding roughly 300 points. The S&P posted an all-time high but ended the day with modest losses.

US Treasury yields continued to advance. The yield on the 10-year note hit 1.686%, holding around 1.66% at the end of the day.

Crude oil prices edged higher, flirting with their recent highs but retreating some ahead of the close. WTI settled at $77.00 a barrel. Gold recovered and retained its gains by the end of the day, closing the day at around $1,814.80 an ounce.

The GBP/USD pair jumped to 1.3556, holding on to gains and currently trading at around 1.3550 after UK Prime Minister Boris Johnson said in a news conference that, given that the country is not seeing the same numbers in intensive care, the UK has a chance to ride out this Omicron wave without shutting down.

EUR/USD advanced as demand for the US dollar reversed, but it was unable to hold on to gains and settled at around 1.1290. Commodity-linked currencies posted gains versus the dollar, with AUD/USD now trading at around 0.7240 and USDCAD changing hands at 1.2700.

Europe keeps reporting record coronavirus contagions, as the Union is in the middle of the peak of the Omicron wave. The number of deaths and hospitalizations is still low, but there’s some disruption in day-to-day activity.