Dollar out of favour as Omicron leaves currency markets unseasonably volatile

Dollar out of favour as Omicron leaves currency markets unseasonably volatile

HONG KONG - The dollar edged down again in early Asia on Wednesday, starting a third successive session under pressure as investors favoured riskier currencies and asset classes. The New Zealand dollar rose 0.8% on Tuesday, its best day since October, recovering from near a year low to last trade at $0.6757, and the pound gained 0.46% - its best day in a month - last trading at $1.3267. With the dollar also gaining 0.44% on the safe haven yen, Tuesday's currency moves were in keeping with advances in oil and a 1.6% gain in MSCI's gauge of stocks across the globe. The result was the dollar index, which measures the currency against major peers, was last at 96.441 down from as high as 96.994 last week when it was testing a 16 month high. Market players struggled to point to a clear reason for the "risk on" mood, saying markets were struggling to assess the consequences of the Omicron variant of COVID-19, leading to unseasonable volatility. Stocks sold off sharply on Monday and the dollar index had gained 0.7% on Friday. While the weeks either side of Christmas are typically low in volatility for currencies and other asset classes,