Forex Today: Market sentiment remains fragile as investors eye 'Omicron' headlines

Here is what you need to know on Monday, November 29:

The intense flight to safety on Friday triggered a sharp decline in US Treasury bond yields and caused global stock indexes to suffer heavy losses. The greenback weakened against the safe-haven currencies, such as the CHF and JPY, but outperformed high beta currencies. Despite concerning news surrounding the new coronavirus variant Omicron, the market mood seems to have improved modestly early Monday. Investors await the German inflation report and euro area business sentiment data but risk perception will remain as the primary market driver at the start of the week.

Reflecting the risk-averse market environment, the S&P 500 Index lost more than 2% on Friday, the 10-year US Treasury bond yield fell 9.4% and the US Dollar Index dropped 0.75%. US stock index futures are up between 0.4% and 1% in the early European session on Monday. Markets are trying to figure out if the Fed will be forced to adopt a cautious stance with regards to policy tightening in the face of potential economic slowdown.

Although the omicron virus had not yet been detected in the US, Dr Anthony Fauci, the nation's top infectious disease doctor and the president's chief medical adviser, said Sunday it was inevitable that the variant would appear in the US.

Meanwhile, vaccine producers are testing the effectiveness of current vaccines against the new variant but they are not expected to announce any results for the next two weeks or so. Pfizer and Moderna both noted that it would take them around 100 days to adjust the vaccine if needed. 

Covid Special Report: How will worst coronavirus variant seen to date affect markets this week?

EUR/USD climbed above 1.1300 but lost its bullish momentum at the start of the new week. The pair is currently trading in the negative territory around 1.1280. 

USD/JPY pair lost more than 200 pips on Friday and opened with a small bullish gap on Monday. The pair stays within a touching distance of 113.00.

GBP/USD struggled to gain traction ahead of the weekend as investors reassess the Bank of England's rate hike prospects. The pair stays in a consolidation phase above 1.3300 to start the week.

AUD/USD and NZD/USD both fell sharply on Friday. Although these pairs stage a rebound on Monday, they remain sensitive to changes in sentiment. 

Gold capitalized on plunging US T-bond yields during the American trading hours but erased a large portion of its daily gains before ending the week around $1,790. XAU/USD is edging higher toward $1,800 in the early trading hours of the European session.

The worsening energy demand outlook amid renewed concerns over the new coronavirus variant causing lockdowns and restrictions caused oil prices to fall sharply. The barrel of West Texas Intermediate lost more than 12% on Friday and was last seen rising 5% at $71.50. The commodity-sensitive CAD struggled to find demand and USD/CAD touched 1.2800 for the first time since late September. The pair is currently edging lower toward mid 1.2700s.

Cryptocurrencies: Bitcoin fell below $54,000 on Sunday but reversed its direction and started to advance higher toward $60,000. Ethereum trades in the positive territory above $4,300 after testing $4,000 over the weekend.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD trades below 1.1450 despite disappointing US data

EUR/USD is having a difficult time gathering bullish momentum in the early American session and trades in the negative territory below 1.1450. The US Census Bureau reported on Friday that Retail Sales in December fell by 1.9%, missing the market expectation of a no-change by a wide margin.


GBP/USD drops below 1.3700 as dollar gains traction

GBP/USD stays under modest bearish pressure in the American session and trades below 1.3700. The US Dollar Index is clinging to modest daily recovery gains near 95.00 despite weaker-than-forecast macroeconomic data releases from the US.


Gold fluctuates in daily range above $1,820 after US data

Gold declined to $1,820 during the European trading hours but managed to edge higher toward $1,830 in the early American. The benchmark 10-year US Treasury bond yield retreated from 1.75% after the dismal US data, allowing XAU/USD to gain traction.

Gold News

Dogecoin price on track to hit new highs, rallying 16% with Tesla payments going live

Tesla announced that it accepts Dogecoin and cannot receive or detect any other cryptocurrency. Analysts have predicted an explosive rally in Dogecoin price, continuing the uptrend. 

Read more

Why did TSLA stock fall 7% on Thursday?

Tesla stock dumps on Thursday as tech takes a bath. TSLA shares fell nearly 7% to close at $1,031.56. Tesla support at the short-term pivot remains at $980.

Read more