Majors stay quiet at start of critical week

Investors remain on the sidelines ahead of this week’s critical events and major currency pairs trade within familiar ranges on Monday. The US Dollar Index holds steady above 96.00 after posting small losses last week with the 10-year US Treasury bond yield moving sideways slightly below 1.5%. Wholesale Price Index from Germany will be featured in the European economic docket and the Bank of England will publish its bi-annual Financial Stability Report later in the day.

Despite some concerning headlines regarding the coronavirus Omicron variant, the market mood is cautiously optimistic in the early European session. Nikkei 225 Index gained 0.7%, US stock index futures are up between 0.3% and 0.35% and the Shanghai Composite Index adds 0.35% on the day.

According to the World Health Organization, the omicron variant has a “growth advantage” over the Delta variant and the preliminary data show that it seems to be reducing vaccine efficacy.

EUR/USD opened with a small bullish gap struggled to gather momentum during the Asian trading hours. The pair is currently trading in the negative territory below 1.1300.

GBP/USD is edging lower on Monday and trades below 1.3250. Over the weekend, Britain announced that it has raised its alert level to ‘Level 4.’ Regarding this decision, “data on the severity will become clearer over the coming weeks but hospitalisations from Omicron are already occurring and these are likely to increase rapidly,” UK medical officers said in a joint statement.

USD/JPY is posting modest gains around 113.50. Earlier in the day, the data from Japan showed that the sentiment in the manufacturing sector improved in the last quarter of the year but a Bank of Japan official noted that firms who took part in the survey did not take the impact of the omicron variant into account.

Gold continues to move sideways in a two-week-old range below $1,800. The yellow metal managed to register some gains after the data from the US showed on Friday that the annual CPI jumped to 6.8% in November.

Cryptocurrencies: Bitcoin is having a difficult time reclaiming $50,000 and Ethereum seems to have returned to $4,000 area after closing the previous two trading days in the positive territory.

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