NZD/USD holds on firm grounds in risk-on environment

NZD/USD is ending the North American session as the laggard amongst commodity-forex as the Aussie and Cad play catch-up in a risk-on environment pertaining to positive news on the covid-front.

At the time of writing, NZD/USD is trading at 0.6753 between 0.6740 and 0.6764 as the range for Monday. That’s despite  US equities, bond yields, oil, CAD, AUD and Bitcoin all higher.

''It’s difficult to attribute the lack of a bounce to anything in particular, but it does seem like the market is fatigued with the NZ good news story, and is less willing to reward currencies heading for higher interest rates,'' analysts at ANZ Bank argued.

The US dollar was firm on the day mostly against safe-haven currencies such as the yen and Swiss franc after reassuring news on the Omicron COVID-19 variant. US Treasury yields climbed and stocks gained after news that initial observations suggested Omicron patients had only mild symptoms, reversing some of Friday's rout in risk-related asset classes and FX.

The coronavirus Omicron variant has now been detected in at least 24 countries around the world, according to the World Health Organization (WHO). However, there is a sentiment that it is not more severe than other variants as of now. 

Since the World Health Organization designated the new Covid omicron variant as being “of concern” less than two weeks ago, preliminary results are starting to emerge that are “a bit encouraging,” the White House’s chief medical advisor, Dr. Anthony Fauci, said Sunday.

He is referring to early figures from South Africa that suggest it may not be as bad as initially feared. While Omicron has spread to about one-third of US states as of Sunday, Dr. Anthony Fauci, the top US infectious disease official, told CNN that "thus far it does not look like there's a great degree of severity to it," though he cautioned that it's too early to be certain.