Dollar Finds Its Footing

As traders braced for increased volatility and the impact of increasing COVID-19 variant Omicron cases, the dollar rose. In contrast, the euro and riskier currencies such as the Australian dollar fell.

Turkey’s lira steadied and held onto recent gains this week despite the currency’s rollercoaster ride.

However, currency movements were minor, as trading volumes were low ahead of the holiday season.

The Australian dollar fell as much as 0.4 percent to $0.7121.

The New Zealand dollar is $0.6742 after rising sharply the day before alongside oil and global stocks.

The dollar index ended a two-day losing streak with minor declines in the pound, another beneficiary rally, and the euro. It edged slightly higher to 96.551, though it remained well within its recent ranges. According to ING analysts, the weeks preceding and following Christmas are typically low in volatility for currencies and other asset classes. Some seasonal tendencies will combine with the Omicron variant this year, threatening to impose new restrictions.

Omicron continues to spook traders, and infections are spreading across Europe, the United States, and Asia, prompting countries worldwide to consider new restrictions on movement and reinstituting quarantine periods for incoming visitors.

Traders in emerging market currencies were bracing for more volatility in Turkey’s lira, which closed up 6% on Tuesday after falling as much as 8.6% and rising as much as 18.5 percent. The lira was the last trading at 12.57 per dollar, down about 1.4 percent. However, it was still holding most of its gains after the currency chargeback from record lows due to President Tayyip Erdogan’s new steps to protect Turks’ savings from such volatility.

The government intends to help slow the dollarization rate in the Turkish economy and the lira decline. The policy action compared to a rate increase for retail deposits. It will shift foreign currency risks onto the government’s balance sheet.




Trading Instrument

Subscribe to our newsletter

Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:News