Omicron dominates news buzz, how are Aussie, NZ dollars doing?

2 min read | December 29, 2021 05:39 PM AEDT | By Sukriti Nair

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Omicron dominates news buzz, how are Aussie, NZ dollars doing? — Image source: © Professor25 | Megapixl.com

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Highlights

Lack of trading activity and economic data is making Omicron the market influencer.

The fast-spreading virus and global restrictions are clouding the Australian economic outlook at present.

Coronavirus cases are peaking all around Australia. Victoria, Queensland and New South Wales have touched record numbers today. Omicron is buzzing the Aussie media ahead of a blank domestic economic calendar. Adding on to the depressing trend of COVID-19 cases, the Australian and New Zealand dollars have also headed south.

How are Aussie, NZ dollars doing?

The Australian and New Zealand currencies are slipping down and Asian markets are trailing low.
The Australian dollar is week with thinned holiday trading at AU$0.772/US$ as of 29 December 2021.
Even the NZ dollar has taken a dip, falling to NZ$0.68/US$ as of 29 December 2021, looming near its one-year lows.
The lack of data on any other economic factor except for the spread of coronavirus and global restrictions seems to be clouding the economic outlook.

What factors influence currency rates?

Often the Australian dollar level is influenced by economic indicators like-

interest rate differentials,
commodity prices like for oil, gold, copper and other metals,
government datasets and key rates from RBA,
and general market sentiment.

However, the only available influencer data as of now is the explosion in coronavirus cases. The current surge in cases is increasing speculation. If it persists and lockdowns are implemented, can put Reserve Bank of Australia's (RBA) optimism to test.

Other key currency influencing data releases lined up in near term include the December jobs report, expected on 20 January 2022 and the consumer prices for Q4 expected by 25 January 2022.

Bottom line -

The AU$ seems to be impacted by the prevailing market mood and the COVID-19 speculation influenced by villainous Omicron. If the pessimism prevails, the AU$ might get affected negatively.

COVID-19 updates- Australia witnesses over 5K COVID-19 cases now; masks and QR check-ins back

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