Currency markets calm on easing Omicron fears

A rebound in risk appetite continued to propel riskier currencies on Wednesday, with the Australian dollar hitting a one-week high, while the euro rose against the dollar as fears the Omicron variant would knock economies off course eased.

Currency markets were generally calm as stocks extended their rebound and investors took comfort from signs the latest Covid-19 variant would not derail the economic recovery.

The dollar index, which measures the greenback against six major peers, was flat at 96.25, while the euro climbed 0.1$ to $1.1281.

“With concerns just starting to ease over Omicron, attention in FX markets returns to the central bankers and how they plan to manage the growth versus inflation trade-off,” ING analysts said, pointing to central bank meetings in Canada, Poland and Brazil, while the US Federal Reserve meets next week.

The Aussie rose as high as $0.71425 and 81.07 yen, levels not seen since Dec. 1.

British drugmaker GSK said on Tuesday its antibody-based Covid-19 therapy with US partner Vir Biotechnology was effective against all mutations of the new Omicron coronavirus variant.