Forex Today: Uncertainty takes its toll on financial markets

What you need to know on Thursday, December 9:

The dollar found some temporal strength during London trading hours but finished the day down against most major rivals. The greenback fell despite European and American indexes closed mostly in the red, and while government bond yields extended gains to fresh weekly highs. Some profit-taking and the notion that the Fed may speed up tapering may have been behind the market’s behaviour.

Trading has been choppy throughout the day, as investors struggle to digest coronavirus developments. France, the UK and Germany had announced restrictive measures amid an escalation of contagions in Europe. On the other hand, Pfizer said that a booster jab of its coronavirus vaccine is effective against the Omicron variant. Early studies suggest that those that got covid plus two shots or those getting the third those are highly protected against the heavily mutated strain. 

The EUR/USD pair recovered up to the 1.1350 region, while the AUD/USD pair nears 0.7200, despite scarce macroeconomic calendars.

Plan B: the UK Prime Minister announced what he called “plan B” to contain the latest coronavirus outbreak. Boris Johnson noted that the number of new cases are doubling every 2-3 days, and announced some restrictive measures. From Friday 10 December, face coverings will become compulsory in most public indoor venues, while from Monday 13 December, those who can will be advised to work from home.

Finally, and subject to parliamentary approval, an NHS Covid Pass will become mandatory to enter any crowd gathering. GBP/USD plummeted to a fresh 2021 low of 1.3244 ahead of the event, although, given the broad dollar’s weakness, the pair finished the day around 1.3230.

Gold keeps ranging within familiar levels, now trading around $1,786.00 a troy ounce. Rude oil prices ticked marginally higher, with WTI now at $72.40 a barrel.

Bitcoin needs support to hold, so that bulls can reclaim $50,000   

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