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Weekly roundup: US dollar loses appeal amid improving market mood

currency-newsWeekly roundup: US dollar loses appeal amid improving market mood
The US dollar fell over the last week of 2021 as global Omicron fears eased, thereby dampening the appeal of the safe-haven currency as upbeat investors looked to riskier, higher-yielding currencies.

New reports seem to corroborate early South African data showing that the Omicron variant produces less severe symptoms than previous coronavirus strains. Although health experts are worried that the benefits of this are negated by the greater transmissibility of Omicron, markets took a more optimistic view.

Positive US data towards the end of the week only added to the positive market mood. US initial jobless claims dropped, holding close to a 52-year low hit in early December, suggesting the robust recovery in the US labour market continues.

Looking ahead, more strong employment data this week could help to boost the US dollar. First the ADP employment change figures on Wednesday and then the non-farm payrolls and unemployment rate on Friday are all forecast to show strong results.

Positive data could feed into expectations of a Federal Reserve rate hike early this year, and USD investors will also be looking closely at the latest meeting minutes from the Federal Open Market Committee (FOMC), which will be published on Wednesday evening.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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