Forex Today: Uncertainty leads a volatile session

What you need to know on Wednesday, December 1:

Financial markets are all about risk-aversion. The American dollar initially fell but changed course during US trading hours to reach weekly highs against most major rivals.

Concerns rotated around the coronavirus pandemic during the first half of the day, with the focus on the newest COVID-19 variant. News suggested that the current vaccines and antibody drugs' cocktails are likely to be less effective against the Omicron strain, although it is still unclear to which extent.

The University of Oxford noted that there's no evidence existing vaccines won't provide some protection against it, although Moderna's CEO said he believes the vaccine effectiveness would probably drop. Mandatory vaccination and borders' closure are spreading rapidly across the globe. At this time, it's unclear how this new strain will affect the ongoing economic recovery. Meanwhile, it would likely exacerbate supply chain issues, one of the main reasons for skyrocketing inflation.

US Treasury yields were sharply lower, weighing on the American currency.  US Federal Reserve Chair Jerome Powell testified on the CARES act before the Senate Banking Committee and surprised investors with his words. Firstly, he said that it is time to retire the term "transitory" for inflation." Risk of more persistent inflation has risen," Powell said. Additionally, he noted that it is appropriate to talk about speeding up tapering in the upcoming December meeting. Market participants rushed into the greenback, helping yields to bounce from their intraday lows.

The shared currency is among the best performers against the greenback, now trading at around 1.1310. GBP/USD, on the other hand, plummeted to a fresh 2021 low of 1.3194 2hile AUD/USD traded as low as 0.7062. The greenback also posted gains vs the CAD, with the pair now hovering around 1.2800.

The dollar's late recovery left safe-haven currencies pretty much flat vs the dollar on a  daily basis.

Gold plummeted after briefly advancing beyond 1,800, now trading at $1,775 a troy ounce. Crude oil prices also fell, with WTI at $66.00 a barrel.

Wall Street came under strong selling pressure, with all indexes closing in the red.

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