What you need to know on Wednesday, December 1:
Financial markets are all about risk-aversion. The American dollar initially fell but changed course during US trading hours to reach weekly highs against most major rivals.
Concerns rotated around the coronavirus pandemic during the first half of the day, with the focus on the newest COVID-19 variant. News suggested that the current vaccines and antibody drugs' cocktails are likely to be less effective against the Omicron strain, although it is still unclear to which extent.
The University of Oxford noted that there's no evidence existing vaccines won't provide some protection against it, although Moderna's CEO said he believes the vaccine effectiveness would probably drop. Mandatory vaccination and borders' closure are spreading rapidly across the globe. At this time, it's unclear how this new strain will affect the ongoing economic recovery. Meanwhile, it would likely exacerbate supply chain issues, one of the main reasons for skyrocketing inflation.
US Treasury yields were sharply lower, weighing on the American currency. US Federal Reserve Chair Jerome Powell testified on the CARES act before the Senate Banking Committee and surprised investors with his words. Firstly, he said that it is time to retire the term "transitory" for inflation." Risk of more persistent inflation has risen," Powell said. Additionally, he noted that it is appropriate to talk about speeding up tapering in the upcoming December meeting. Market participants rushed into the greenback, helping yields to bounce from their intraday lows.
The shared currency is among the best performers against the greenback, now trading at around 1.1310. GBP/USD, on the other hand, plummeted to a fresh 2021 low of 1.3194 2hile AUD/USD traded as low as 0.7062. The greenback also posted gains vs the CAD, with the pair now hovering around 1.2800.
The dollar's late recovery left safe-haven currencies pretty much flat vs the dollar on a daily basis.
Gold plummeted after briefly advancing beyond 1,800, now trading at $1,775 a troy ounce. Crude oil prices also fell, with WTI at $66.00 a barrel.
Wall Street came under strong selling pressure, with all indexes closing in the red.
Top 3 Price Prediction Bitcoin, Ethereum, XRP: Leading cryptos take the back seat
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades at yearly lows below 1.0500 ahead of PMI data
EUR/USD stays on the back foot and trades at its lowest level since October 2023 below 1.0500 early Friday, pressured by persistent USD strength. Investors await Manufacturing and Services PMI surveys from the Eurozone, Germany and the US.
GBP/USD falls to six-month lows below 1.2600, eyes on key data releases
GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2600. This downside is attributed to the stronger US Dollar (USD) as traders continue to evaluate the Fed's policy outlook following latest data releases and Fedspeak.
Gold rises toward $2,700, hits two-week top
Gold continues to attract haven flows for the fifth consecutive day and rises toward $2,700. XAU/USD continues to benefit from risk-aversion amid intensifying Russia-Ukraine conflict. Investors keep a close eye on geopolitics while waiting for PMI data releases.
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.