Uncertainty Quakes Financial Markets

The dollar reaped some strength during London trading hours but finished the day down against most major currencies. The US dollar fell despite European and American indexes closed mostly in the red territory, and while government bond yields extended gains to fresh weekly highs.

Some profit-taking and the opinion that the Fed may speed up tapering may have been behind the market’s performance during the North America session.

Trading has been uneven throughout the day, as investors are busy digesting coronavirus developments. The UK and Germany announced restrictive measures amid an escalation of contagions in Europe, and France took similar measures.

Pfizer said that a booster jab of its coronavirus vaccine is effective against the Omicron variant. Early studies suggest that those that got COVID plus two shots or those getting the third those are highly protected against the Omicron strain.

The EUR/USD pair recovered up to the 1.1350 region, while the AUD/USD pair nears 0.7200, despite rare macroeconomic calendars.

Plan B: the UK Prime Minister announced what he called “plan B” to contain the latest coronavirus outbreak. Boris Johnson noted that the number of new cases are doubling every 2-3 days.

UK’s Johnson announced some restrictive measures. From Friday 10 December, face coverings will become compulsory in most public indoor venues, while from Monday 13 December, all who can, are advised to work from home.

The GBP/USD pair retreated to newly recorded 2021 low at 1.3244 despite the US dollar’s weakness, the pair finished the day around 1.3230.