Holdings on the safe-haven are slowly being released by investors as concerns over the Omicron coronavirus variant have eased, thus giving gains for risk-sensitive currencies to rise again.
Risk-sensitive currencies, particularly the Aussie dollar welcomed the Australian Central Bank’s (RBA) cautiously optimistic statement about Omicron despite not making any policy changes.
The Aussie dollar rose 0.5% to 0.7090 against the US dollar following this decision, after the central bank raised its prospects for Australia’s economic recovery in the first half of 2022.
While the US dollar giant remained stable, seeing the dollar index rise to 96.40 against its main rival after a gloomy session in the previous session.
Investor confidence for an earlier tightening of monetary policy from the US Federal Reserve (Fed) continued to give strength to the greenback dollar to maintain its position at the highest peak.
Meanwhile, the euro rebounded from its gains, with the focus now shifting to the publication of German economic sentiment data from the ZEW survey at 6pm (Malaysian time).
The pound also declined, erasing gains made in the previous session, bringing it to trade at 1.3260 against the USD.
Moreover, the Canadian dollar found support from world crude oil prices that rebounded from last week’s fall. The loonie traded 0.3% higher against the greenback, with it trading at around 1.2716.
