As investors took off the desk, currency forex market trading volumes dwindled ahead of Christmas. For the week, risk assets closed higher as market sentiment turned positive on encouraging Omicron development news.
Omicron’s positive news outweighed upbeat economic data to plunge haven currencies while fueling demand for risky assets. By the week’s close, the top spot went to the Australian dollar, while the US Japanese yen took refuge at the bottom.
Currency Forex Market Trading Fundamentals
Positive sentiment fueled largely by Omicron news drove the market for the week. Positive economic data also featured in action.
Positive Developments on Omicron
Investors’ fears on the Omicron variant are now firmly under the bus as fresh studies indicate it is less fatal than previous coronavirus strains. Recent scientific studies provide more hope.
A study in South Africa revealed vaccinated individuals exposed to the Omicron variant develop stronger immunity. Adding to the optimism, a study in the UK indicates Omicron infections are up to 70 percent less likely to cause hospitalization.
Medical reports indicate AstraZeneca and Moderna booster vaccines provide stronger immunity against the Omicron variant. The perception that the Omicron is less deadly than the delta variant motivated traders and helped to upbeat market optimism this week.
Economic Data
Despite a short week ahead of the Christmas festivities, G7 nations posted positive economic updates. Key statistics included inflation rate, consumer confidence, and GDP.
The g7 nations released positively skewed economic data, which had a muted impact on the currency forex market trading. Traders focused more on the positive developments on the Omicron virus.
Crude Oil Prices
oil prices rallied strongly through the week, supported mainly by the positive developments on the Omicron variant. Oil gained over four percent to trade above $73 per barrel for the week.
Improved global economy and heightened activities in the Christmas season uplifted the demand for the globals leading energy source.
Changes in oil prices have a direct bearing on commodity-linked assets. So with the improvement of oil prices, the Canadian dollar also gained strength.
G7 Economic and Fundamental Analysis
Table: g7 currencies performance summary
| Currency pair | 18th December 2021 | 24th December 2021 | Average price | Percentage change | Remarks |
| USD | 96.545 | 95.985 | 96.269 | 0.583 | drop |
| GBPUSD | 1.3207 | 1.3385 | 1.3322 | 1.0799 | increase |
| EURUSD | 1.1275 | 1.1317 | 1.1305 | 0.6940 | increase |
| USDCHF | 0.9210 | 0.9293 | 0.9204 | 0.4743 | increase |
| USDJPY | 113.58 | 114.41 | 114.11 | 0.65 | increase |
| USDCAD | 1.2941 | 1.2810 | 1.2861 | 0.5859 | drop |
| AUDUSD | 0.7109 | 0.7223 | 0.7188 | 1.3897 | drop |
| NZDUSD | 0.6713 | 0.6816 | 0.6784 | 1.1726 | drop |
US Dollar Current News
it was back to the red for the American dollar as risk appetite returned to the forex market. The dollar lost 0.57 percent to 96.019, having rallied by 0.60 percent the week before. According to investing.com, the Greenback suffered its worst week since September, recording massive losses throughout the week.
Midweek, GDP, and consumer confidence data drove currency forex market trading. America’s third-quarter economy expanded by 2.3 percent, and the consumer confidence index shot to 115.8 from 11.9.
Consumer confidence improved amidst Omicron concerns, increasing prices, and hawkish monetary policies. At the end of the week, the White House released more economic data supporting the dollar.
According to US dollar current news, core durable goods spiked 0.8 percent, and personal spending rose 0.6 percent. Also, inflation surged to 4.7 percent from 4.2 percent.
But ultimately, positive development on Omicron concerns weighed heavily on the dollar, despite the positive economic data. One, infections continue to spike to new highs in the US. According to recent studies, it is less lethal than the delta variant.
GBP USD Forex News
For the week, the sterling pound gained 1.06 percent to 1.3386. In the week before, it had dropped 0.21 percent. Britain released mixed economic data in a relatively quiet week, which did not provide proper direction for the pound.
First, industrial trend orders dropped to 24 from 26. Second, the quarterly economy expanded 1.1 percent, and the yearly economy surged 6.8 percent. But while the statistics had a muted impact on the pound, the risk appetite mood delivered its superb performance.
In other gbp usd forex news, Brexit poses a challenge to the pound. And fourth coronavirus wave weighs heavily on UK citizens.
Forex News Eur Usd Analysis
For the week, the euro gained 0.70 percent to 1.1319 against the dollar, having fallen 0.65 percent previously. Forex news eur usd analysis indicates eurozone and Germany posted negative economic data which weighed on the euro.
Earlier in the week, consumer confidence data for the eurozone and Germany failed to support the euro. Both regions’ consumer confidence declined due to coronavirus containment measures and inflationary pressure.
Germany’s consumer confidence dropped to -6.8 from -1.6, pushing the eurozone’s level to -8.3 from -6.8. However, despite the reduced confidence, the effect on the euro was minimal as traders expected it.
Significantly, Omicron surge and restriction measures across Europe undermined the euro this week. Coronavirus infections have increased in many EU nations due to the Omicron strain.
And in efforts to curb the rapid spread of the virus, European member states introduced health passes and tougher regulations.
USD CHF Weekly Outlook
The Swiss franc closed 0.4743 percent lower to 0.9293 against the US dollar for the week. In the week before, the Swisse had lost 0.3040 percent. The Swiss franc rallied strongly against the dollar throughout the week.
However, positive sentiments in currency forex market trading due to Omicron developments undermined the haven status of the Swissie. Besides, the US hawkish outlook reigned over the Swiss franc.
Analysts predict risk on appetite, and an improved global economy will continue to boost usd chf weekly outlook.
Predictions For USD To CAD
Over the week, the Canadian dollar rallied 0.57 percent to 1.2815 against the Greenback. In the week before, the Loonie had dropped 1.31. At the beginning of the week, positive economic updates uplifted predictions for USD to CAD.
After declining previously, retail sales surged 1.6 percent, with core retail sales ascending 1.3 percent. Month-on-month, Canada’s monthly economy grew 0.8 percent following a 0.2 percent growth.
While the economic data bolstered predictions for usd to cad, positive sentiments and improved crude oil prices added more fuel.
Asia-Pacific Currency Forex Market Trading
In the Asia-Pacific region, both Aussie and Kiwi dollars rallied. Meanwhile, the bears took control of the yen.
Australian Exchange Rate News
The Aussie dollar took the top spot this week, rising 1.35 percent to 0.7221 against the Greenback. Over the week, economic data, market sentiments, and central bank meetings significantly drive Australian exchange rate news.
On the economic front, private sector credit figures though positive had muted impact on the Australian dollar. Midweek RBA meetings provided additional support for the Loonie. The bank painted an encouraging outlook on the economic recovery efforts in Australia.
NZ Dollar Currency News
Hot on the heels of the Australian dollar, the Kiwi dollar gained 1.17 percent to settle at the second spot. According to NZ dollar currency news, New Zealand posted mixed economic data.
Fourth-quarter consumer sentiment worsened further. New Zealand’s consumer Sentiment Index dipped to 99.1 from 102.7. On the other hand, New Zealand’s monthly trade deficit tapered to 864million from 1.302 billion.
However, the yearly trade deficit expanded to 6.040 billion from 4.900 billion. While monthly product exports expanded percent, imports spiked three times, at 37 percent.
Yen Versus Dollar
For another week, the Japanese yen suffered yet another weekly loss. The currency closed the week at 114.380 versus the American dollar, down 0.58 percent. This came after a previous quarter-point drop, which decreased its total value by 0 .25 percent in the previous week’s trading.
Friday, inflationary pressure had a slight impact on currency market forex trading. On Friday, the Japanese economy just got a little more expensive. The annual inflation rate for the country climbed to 0.5% from 0.1%. Economists had predicted a 0.4 percent raise.
Japan’s government projects its economy to grow faster at 3,2 percent in the next financial year.
Week Ahead
It’s a particularly quiet week with traders still on a break. But, all in all, these fundamentals will impact the market.
- on the economic front, inflationary pressure across Europe and US jobless claims, among other statistics, are expected to drive coming week currency trading
- updates on the Omicron variant
- central bank monetary chatter
Final Thoughts
After the latest omicron variant developments, the American dollar closed lower in currency forex market trading revived global risk appetite. However, except for the Japanese yen and swiss franc-haven currencies, the dollar rose against others.
Scientific studies indicate the variant is less lethal than the other variants. Besides, a booster vaccine effectively provides immunity against the virus.
So, could this be it? That the…. Recent developments on the covid 19 an end to the pandemic!
Must Read: Forex Trading News Events From 11th Dec to 17th Dec, 2021
