USD/CHF: The USD/CHF pair dropped to over a two-week low during the early European session yesterday. It had almost reached 0.9150 support level before it rebounded sharply. After that, the USD/CHF pair pulled back, with bears pressuring the market into their zone. One of the main reasons for the broad US dollar decline on Tuesday was Moderna’s CEO speech that COVID-19 vaccines are unlikely to be as effective against the Omicron variant as they have been with other types. Risk appetite pressured safe haven instruments with the greenback weakening. Investors will be focused on Fed Chair Jerome Powell’s testimony before the Senate Banking Committee. Powell’s remarks will influence market expectations about the Fed’s next policy move and drive the USD demand. Apart from this, traders will expect broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.
AUD/USD: AUD/USD is showing a bearish dynamic after an uptrend on better-than-expected Australia GDP data for the third quarter during Wednesday’s Asian session. The price remains within a narrow trading range after bouncing off the yearly low a few hours before that. Earlier in the day, Australia’s Manufacturing PMI showed growth in November. Even so, the quotes keep being supported by the risk catalysts amid mixed concerns over the South African coronavirus variant. Also, the reflation fears and Fed rate hike are challenging the Aussie traders.
WTI: West Texas Intermediate crude oil dropped to the lowest level in more than three months yesterday. There are concerns about rising Covid-19 infections and fears that the new variant will be resistant to the existing vaccines, which can affect oil demand. By the way, CME Group’s preliminary readings for crude oil futures markets showed that traders scaled back their open interest positions by more than 25K contracts in the beginning of the week. It’s also worth noting that OPEC+ raised quotas by 0.4-million barrels per day, which could support oil bears.