US Dollar, Yen, Swiss Franc climb as Delta variants dent risk-appetite

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US Dollar, Yen, Swiss Franc climb as Delta variants dent risk-appetite

On Monday, the American currency had witnessed a meteoric rally against a number of major and emerging market currencies, as an intransigent spike in delta variants around the globe had histrionically dented risk-appetites, while a remark from the US President Joe Biden that a latest uptick in inflation indicators would be ‘transitory’ and the US Federal Reserve should do what it deemed necessary for a recovery, added to further holocaust amid growing anticipation of a hawkish Fed stance in a near term.

Aside from that, with the safe-haven US Dollar, Yen and Swiss Franc climbing in context of a dramatic downfall in risk-appetites, US Treasury bond Yields had beaten a hasty retreat as 10-year US Treasury bond notes pummelled to 1.17 per cent, the lowest in five months, while the British Pound had hit a three-month low against the greenback.

In factuality, risk-sensitive currencies such as Australian Dollar, New Zealand Dollar alongside Canadian Dollar fell sharply on Monday amid a double whammy of an abrupt upsurge in delta variants across the United States and UK alongside a remark from the US President Joe Biden that had largely echoed a dovish policy stance from the Fed Chair Jerome Powell.

Speaking in a Congressional hearing last week, Fed Chair Powell had told that the US Central Bank would remain accommodative until solid signs of recovery in the labour market, making taper-talks a distant dream.

US Dollar gains as Biden backs Powell policy, delta variants rise

Quoting statistics, in the day’s FX market wind up, the US Dollar Index (DXY) measured against a basket of six major currencies on an average rose 0.2 per cent to 92.82, while safe-haven Japanese Yen had spiked to a 1-1/2-month high against the greenback.

Besides, the bloc’s common currency euro, shared among 19 eurozone countries, fell 0.04 per cent to $1.1801 against its American counterpart, as the British Pound was pummelled 0.66 per cent to a three-month low of $1.3673.

Aside from that, another safe-haven asset Swiss Franc added 0.17 per cent against its American peer to $0.9178, while Aussies shed 0.88 per cent to $0.7335 and Kiwis dived 0.89 per cent to $0.6938. In tandem, the US Dollar gained as much as 1.09 per cent against its Canadian peer to $1.2756.

Meanwhile, addressing to a growing investors’ angsts over a latest rise in delta variants across the United States, a senior analyst at DailyFX, Christopher Vecchio said, “The wall of worry is being built. Lower equities, lower yields, strength in the Japanese yen and the US dollar all amount to a significant risk-off impulse in markets”.