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The dollar fell against other major currencies on Tuesday, and the yen rose to near its highest levels in more than two weeks after the CEO of Moderna Pharmaceuticals told the Financial Times that current vaccines against Covid-19 are likely to be less effective against the new mutant Omicron.
Markets around the world sought to avoid risks. The dollar fell by 0.3 percent against its rival currencies, while the yen rose by 0.4 percent against the dollar, hitting its highest level since early November, reaching 112.95 yen to the dollar.
US Treasury yields fell six basis points to their lowest in two weeks, sending the dollar lower after markets adopted the view that the prolonged fight against the virus would undermine expectations about the speed of the Federal Reserve’s decision to raise rates in 2022.
The Swiss franc rose to its highest level in two weeks against the dollar but remained not far from its lowest level since July 2015 against the Euro.
The Australian dollar fell 0.65% to a new 12-month high of $0.7093, and the New Zealand dollar fell 0.6 percent to $0.6783 after the statements were published, close to recording the worst monthly performance since May 2015.
The Euro is expected to give up gains ahead of the Eurozone consumer price data for November. The Euro fell close to its lowest level in nearly 17 months and reached 1.11864 dollars last week, as policymakers in the European Central Bank stuck to their soft stance in the face of inflation.
Before the emergence of the mutant Omicron, the main driver of the currency markets was the dealers’ perceptions of how quickly the various central banks in the world would end the stimulus they had taken in the face of the pandemic and raise interest rates with their aspiration to combat inflation without harming growth.
