US Dollar Index (DXY) Rebounds, Joins Broader Market Rally Amid Omicron Fears

Free $100 Forex No-Deposit Bonus

The US dollar is rebounding to kick off the trading week, joining the rally in the broader financial markets. The greenback has been one of the top-performing currencies, but it, too, fell victim to the market meltdown on what is being described as Red Friday. Is it all clear on the western front?

The overall forex markets calmed down on Monday, despite the omicron variant of concern dominating international headlines. Traders are ostensibly adopting more of a wait-and-see approach to investing.

Still, market analysts are anticipating volatility ahead of currencies.

“Until then, market volatility is likely to remain elevated,” said Rodrigo Catril, a senior FX strategist at National Australia Bank, in a client note. “Markets have been forced to reassess the global growth outlook until we know more.”

Global financial markets will monitor President Joe Biden’s speech on Monday when he provides an update on America’s response to the new variant. Although the World Health Organization (WHO) has urged everyone to avoid a knee-jerk reaction, officials have been reacting by closing borders and suspending travel to and from key destinations.

Meanwhile, investors will be paying close attention to speeches from several Federal Reserve leaders on Monday afternoon. Fed Chair Jerome Powell and outgoing Fed Vice-Chair Richard Clarida will be speaking and they might offer some insight into how the omicron variant could impact the US central bank’s monetary policy moving forward.

The US Treasury market was mostly green across the board, with the benchmark 10-year yield up 0.063% to 1.545. The one-year bill jumped 0.023% to 0.201%, while the 30-year bond rose 0.055% to 1.885%.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, edged up 0.11% to 96.20, from an opening of 96.16. The index suffered a weekly loss last week of 0.3%, but it is still up 7% year-to-date.

The USD/CAD currency pair fell 0.43% to 1.2737, from an opening of 1.2760 at 11:59 GMT on Monday. The EUR/USD dropped 0.34% to 1.1280, from an opening of 1.1305.

Copyright © 2022. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.