US dollar fall resumes

Dollar dips as Omicron concerns ease

After trading sideways for a few sessions, receding omicron concerns amongst investors saw the US dollar resume its gentle retreat overnight as traders moved out of defensive positioning. The dollar index fell by 0.28% to 95.89, before rising to 95.95 in listless Asian trading. Support at 95.85 remains marginally intact, and a daily close below 95.80 should signal further losses to 95.50.

Major currencies continue to build modest gains with EUR/USD rising to 1.1345, and GBP/USD jumping to 1.3485 as omicron hospitalisations remain controllable, even as infection numbers surge. USD/JPY has added 20 points to recapture 115.00 as defensive long-yen positioning continues to be unwound. AUD/USD has risen slightly to 0.7250, NZD/USD to 0.6845, and USD/CAD has eased to 1.2790 as investor risk appetite continues to improve.

Asian currencies have performed well this week, backstopped by a stubbornly firm Chinese yuan, despite weaker PBOC fixings. One would have to say that the renewed risk appetite from international investors is being most strongly expressed in regional Asian currencies at the moment.

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