Omicron keeps affecting risky assets

December 09, 2021

USD/CAD: The loonie was lower against the dollar on Wednesday as the Bank of Canada disappointed some investors who had expected a move to a more aggressive stance. As a result, the currency fell from its highest level in nearly three weeks. The BoC left its benchmark interest rate at 0.25%, as expected, and maintained its guidance that a first interest rate hike could come in April 2022. Investors were on guard for a hawkish shift after recent domestic data showed strength in inflation, employment and gross domestic product growth. The Canadian dollar was trading 0.1% lower at 1.2655 to the greenback. Immediate support is located at 1.2630. A breakout below could take the pair towards 1.2580.


SELL STOP 1.2630/TP 1.2580/SL 1.2650

 

EUR/USD: The euro-recovered ground against the dollar on Wednesday as fears that the new Omicron variant would knock economies off course eased. Currency markets were generally calm as stocks extended their rebound and investors took comfort from signs the latest COVID-19 variant would not derail the economic recovery. Further dynamics of the euro will depend on the situation with the coronavirus, as well as the actions of the American regulator regarding monetary policy. The current news backdrop is more suitable for selling the euro against the dollar. Immediate support is found at 1.13. A breakout below could take the pair towards 1.12.


SELL STOP 1.13/TP 1.12/SL 1.1330

 

USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as easing concerns about the economic hit from the Omicron COVID-19 variant helped support riskier currencies. Investors’ appetite for riskier assets improved this week amid reports that people infected with Omicron in South Africa had only shown mild symptoms. The U.S. central bank is scheduled to hold its final policy meeting of the year next week. An increased pace of asset purchases’ tapering is widely expected. Strong resistance is located at 114.00. A breakout to the upside can trigger growth towards 114.50.


BUY STOP 114.00/TP 114.50/SL 113.80