After investors returned to the riskier currencies and stocks the day before, the yen fell to new monthly lows and the pound hit a six-week high in holiday trading on Thursday.
These moves appear to be linked to a recent improvement in sentiment as many governments resist imposing new, prevalent restrictions despite an increasing number of omicron variants of the coronavirus.
Reuters data shows that the number of COVID-19 cases worldwide has reached a record high in the past seven days.
“The market continues to rise in value, alleviating Omicron’s concerns about low hospitalization rates,” Jeffrey Halley, Chief Asia Pacific Market Analyst at Oanda said.
The Japanese currency hit a monthly low of 115.05 per dollar and a quarter low from the November low of 115.51. Halley also attributed the yen’s weakness to Japanese investors placing cash abroad. £4,444 reached $1.3505 and hit a six-week high before hitting resistance and dropping.
The riskier Australian dollar continued to climb to $0.72585. On the other hand, the EUR was down 0.15% to hit $1.333 after hitting a one-month high on Wednesday. The move from the safe yen to the Australian dollar also coincided with movements in other asset classes.
The S&P 500 and the Dow Jones Industrial Average closed at all-time highs on Wednesday, with the latter rising in their sixth session. However, as many traders were absent by the end of the year, analysts warned not to focus too much on the move, and rising US yields helped lower the dollar, preventing sharp price movements.
The benchmark 10-year yield reached 1.56%, the highest since Nov. 29 in US trading after the US Treasury sold $56 billion in seven-year bonds on Wednesday in weak demand. The recent yield was 1.5462%.
Additionally, the Turkish lira was down 6.9% on Wednesday at $12.7 per dollar. The government-backed market intervention was up more than 50% last week but fell 40% this year. However, Turkish Finance Minister Nureddin Nebati said on Wednesday that current fluctuations in the lira exchange rate were not of concern and would return to normal levels.
Bitcoin has stabilized after two days of loss. The world’s largest cryptocurrency traded at an all-time high of $69,000 in November and then fell below $46,700.