US Dollar Trades on Upbeat Bias Amid Growing Risk Appetite

Updated:

As reported earlier, investor risk appetite took a bump since Monday after the markets got rattled by restriction measures by governments globally to curb the spread of the Omicron variant, and US Senator Joe Manchin dumped President Biden’s Build Back Better fiscal spending package.

Commenting on the risk-on sentiment, analysts at Brown Brothers Harriman noted that “the dollar is softening as risk-off impulses continue to ebb,” adding that “we are likely in a consolidative period for now given the lack of any major new drivers.”

Meanwhile, the US dollar index (DXY) trades neutrally at 96.11 at press time and remains close to its yearly high of 96.938 recorded on November 24, on expectations of a rate hike by the US Fed.

Economic data released yesterday showed that the US consumer confidence saw a boost in December, indicating that the economy would maintain an expansive pattern in 2022, despite the spike in COVID-19 infections and tapered fiscal stimulus.

EUR, NOK, GBP, and AUD Gain Against US Dollar Despite Bullish Greenback Momentum

Moving on, the euro gained against the dollar on Thursday, as it tapped the 1.1340 high. The risk-sensitive Aussie (AUD) also gained against the dollar, recording a new monthly high at 0.7240 in the early London session on Thursday.

The greenback also lost against the Norwegian krone (NOK), as the Norwegian currency got a boost from rising oil and gas prices and usually experiences an upbeat sentiment around Christmas periods.

Finally, the British pound added 0.37% against the dollar to record a new monthly high at 1.3406, despite recent data showing that the UK’s economy grew much slower than it did in Q3 2021.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.