Forex Today: Currencies trying to find their way
04.01.2022, 19:54

Forex Today: Currencies trying to find their way

What you need to know on Wednesday, January 5:

 The greenback kept advancing on Tuesday, posting the most notorious advance against the yen. USD/JPY jumped to 116.36, its highest since January 2017, as the dollar surged alongside US government bond yields. Demand for the American currency receded with Wall Street’s opening, with the dollar ending the day unevenly across the FX board.

US indexes were mixed, with the DJIA reaching a record high and holding on to gains, but the Nasdaq Composite shedding roughly 300 points. The S&P posted an all-time high but ended the day with modest losses.

US Treasury yields continued to advance. The yield on the 10-year note hit 1.686%, holding around 1.66% at the end of the day.

The OPEC+ announced its next meeting for early February, agreed to stick to its current policy of increasing 400,000 bpd. Crude oil prices edged higher, flirting with their recent highs but retreating some ahead of the close. WTI settled at $77.00 a barrel.

Gold recovered and retained its gains by the end of the day, closing the day at around $1,814.80 a troy ounce.

The GBP/USD pair jumped to 1.3556, holding on to gains and currently trading at around 1.3550 after UK PM Boris Johnson said in a news conference that, given that the country is not seeing the same numbers in intensive care, the UK has a chance to ride out this Omicron wave without shutting down.

EUR/USD advanced as demand for the greenback reversed, but it was unable to hold on to gains and settled at around 1.1290. Commodity-linked currencies posted gains vs the dollar, with AUD/USD now trading at around 0.7240 and USDCAD changing hands at 1.2700.

Europe keeps reporting record coronavirus contagions, as the Union is in the middle of the peak of the Omicron wave. The number of deaths and hospitalizations is still low, but there’s some disruption in day-to-day activity amid the mandate to isolate those suffering the illness. Meanwhile, France announced the discovery of a new coronavirus variant, IHU, with has more variants than Omicron.

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