Dollar rebounds as Omicron variant recede

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Dollar rebounds as Omicron variant recede

After Friday's drop in Yen, Swiss franc fell vs dollar Graphic: World FX rates weakened on Monday as governments around the world sought more information about the new coronaviruses, the dollar moved higher as the yen and Swiss franc fell, reversing some of Friday's moves. The Omicron variant is https: www.reuters. Financial markets sell-off on Friday on fears that it would disrupt a growing economic recovery after the two-year Pandemic. The World Health Organization said it was not yet clear if Omicron has been found around the world https: www.reuters. Com world global-spread Omicron-cases associated travel curbs -- 2021 -- 11 -- 29, is more transmissible than other variants or if it causes more severe disease. Markets calmed slightly on Monday, with U.S. stock and oil prices rebounding as investors took a more balanced view, waiting for the impact of the variant. The dollar index, which had its biggest one-day drop since May on Friday, rose 0.1% to 96.357 The dollar's status as a safe haven means it benefits from uncertainty, but it fell on Friday because of the Omicron variant that was seen as potentially affecting when the Federal Reserve and other major central banks raise rates. Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, said Dollar bulls are hopeful that vaccines will be tweaked to tackle Omicron. Omicron has injected uncertainty into the outlook for Fed policy, but higher rates are still on the table for next year. The euro, which was down 0.4% against the dollar on Friday, was at $1.1268, its highest since December 2020. Japan's yen fell against the dollar, which rose 0.3% to 113.845 yen. The Swiss franc reversed recent moves. It had its biggest one day jump against the dollar since June 2016, a slightly bigger daily move than at the peak of the first coronaviruses market shock in March 2020, but on Monday it was down 0.4% on the day, at 0.9256 francs. VACCINE EFFICACY European Central Bank policymakers argued that the euro zone's economy had learned to cope with successive waves of the epidemic, as a result of the VACCINE EFFICACY. In a client note, Ulrich Leuchtmann, head of FX and commodity research at Commerzbank, said that the euro had initially benefited from the Omicron variant because of the dovishness of the ECB. The currency markets would likely remain volatile until the new variant was better understood, according to analysts. Goldman Sachs will not change its economic forecasts on the basis of the Omicron variant until its likely impact becomes clearer. Before picking up, cryptocurrencies hit a seven-week low on Sunday. It was down 0.4%, at $57,119 at the end of the day. It was its all-time high of $69,000 earlier this month.