The dollar weakened Friday morning in Asia. But losses were decreased as growing considerations regarding the fresh discovered COVID-19 variant dampened investors' risk appetence.
The US Dollar Index which tracks the greenback against a basket of other currencies inched down 0.07% to 96.685 by 9:57 pm ET (02:57 GMT). The index moved additional far from 96.938, its highest level in nearly seventeen months hit on weekday.
However, it's up 0.73% on the week and poised for a fifth straight weekly gain. The USD/JPY pair fell 0.58% to 114.68. The AUD/USD combine fell zero.63% to 0.7145, at the same time as Australian retail sales grew a better-than-expected 4.9% month-on-month in Oct.
The NZD/USD pair fell 0.42% to 0.6830. The rand fell to its lowest level in more than a year, at 16.17 per dollar, with concerns growing about the variant B.1.1529 of COVID-19 found in South Africa that could make the vaccine less effective.
COVID-19 issues square measure taking part in a task in increasing demand for safe havens together with the yen, and since African nation is that the location of this new variant, that is a noticeable reason to avoid the rand.
The Increase in Covid-19 Cases Greatly Affects the Currency
In Europe, the rising number of COVID-19 cases prompted Germany to consider following in the footsteps of its neighbour Austria and re-imposing the lockdown.
Meanwhile, Associate in Nursing progressively hawkish tone from the America Federal Reserve System has accrued bets on a rate hike in mid-2022, whereas counterparts in Europe and Japan stay on an additional peaceful stance.
Bank of Japan Governor Haruhiko Kuroda reiterated his commitment to the huge financial input last week, whereas the minutes from the EU Central Bank's Gregorian calendar month meeting, were free on weekday.
If the COVID-19 situation worsens, then the dollar-yen could fall further, but otherwise, monetary policy divergence will weigh on the yen in the medium term, said Kadota of Barclay, who predicts the dollar-yen will strengthen to 116 and beyond by mid-2022.
Signals continued stimulus and a cautious approach to any policy change. On the opposite hand, 114 oughts to offer a basis for the currency try within the close to term, unless the planet turns for the more severe, he added.
On Friday the US Dollar moved lower. But the dollar's loss was not great. However, this will be what makes issues regarding the number of Covid cases increasing capitalist risk craving.
The index's movement was further than the previous Wednesday's 96.938, making it the highest in 17 months. In addition, the strengthening is also preparing to record the fifth week in a row.
Dollar Movement Against Other Currencies
Then the US Dollar Index, which is a gauge for the greenback in other currencies, weakened 0.17% to 96.710. It is known that the USD/JPY pair weakened by 0.56% to 114.71 levels. Then followed by the Rupiah which also fell 0.44% at 14,327.5 per US dollar.
Then there was AUD/USD which fell 0.70% to 0.7140, especially when retail sales in Australia expanded by around 4.9% MoM (Month of Month). There was still NZD/USD down 0.49% to 0.68226.
Meanwhile, USD/CNY strengthened slightly by 0.08% to 66.3913. Then there's GBP/USD which is slightly down 0.12% at 1.3305. Even the Rand also slumped at 16.17 per US dollar and made it the lowest in a year.
This is due to the increasing concern about the emergence of Covid variant B.1.1.529. This Covid case certainly brings concern in giving a big role, including the increasing demand for shelter, one of which is the yen.
Indeed, currently in Europe, the number of Covid cases is increasing. This led Austria to impose a strict lockdown. And even Germany is considering following in Austria's footsteps.
If the Covid case situation does not improve, the impact on the dollar-yen will also get worse and fall even deeper. If not, however, there will be policy differences impacting the yen shortly.
