Safe-haven yen sinks to one-month low as Omicron worries ebb

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TOKYO — The yen traded near a one-month

low to the dollar on Tuesday as safe-havens fell out of favor

following Wall Street’s rally to a record high overnight, with

Omicron uncertainty consigned to the background.

The Japanese currency weakened as far as 114.935 yen per

dollar for the first time since Nov. 26, approaching

the year-to-date low of 115.525 reached Nov. 24.

The S&P 500 ended at a record high on Monday after

strong U.S. retail sales data eased worries from the highly

infectious Omicron coronavirus variant, which has forced

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thousands of flight cancellations and delays over the holidays

and stranded cruise ships.

The U.S. dollar, also viewed as a safe-haven, continued to

languish toward the bottom end of its recent trading range

versus a basket of peers, even after a hawkish tilt at the

Federal Reserve that had policy makers signaling three

quarter-point interest rate increases next year.

The dollar index, which measures the currency against

six major rivals, was little changed from the previous session

at 96.076.

“Markets globally are optimistic” that Omicron won’t derail

an economic recovery, denting demand for haven currencies,

predominantly the yen, said Osamu Takashima, head of G10 FX

strategy at Citigroup Global Markets Japan.

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The U.S. equities rally “implies that currently investor

risk appetite must be very, very strong” despite expectations

for faster Fed tightening, he said.

The yen is likely to test its 2021 low in the near term, he

predicted.

Sterling, which often rises when risk sentiment

improves, held close to the one-month high of $1.3445 reached

overnight.

The Australian dollar, often considered a liquid

proxy of risk appetite, inched up back toward a three-week high

at $0.6850, reached Friday.

The euro consolidated near the top of its range

against the dollar this month, little changed from Monday at

$1.13255.

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Currency bid prices at 0123 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

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Previous Change

Session

Euro/Dollar $1.1324 $1.1327 -0.02% -7.31% +1.1332 +1.1325

Dollar/Yen 114.8600 114.9100 +0.00% +11.26% +114.9450 +114.7800

Euro/Yen

Dollar/Swiss 0.9173 0.9178 -0.08% +3.65% +0.9176 +0.9165

Sterling/Dollar 1.3433 1.3442 -0.04% -1.65% +1.3442 +1.3434

Dollar/Canadian 1.2794 1.2786 +0.05% +0.46% +1.2794 +1.2788

Aussie/Dollar 0.7233 0.7240 -0.08% -5.95% +0.7240 +0.7234

NZ 0.6810 0.6815 +0.12% -4.99% +0.6817 +0.6823

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Kevin Buckland; Editing by Sam Holmes)