FX market recovers from Omicron chaos but volatility may still rise ahead; German inflation surged to 6% with ECB insisting that it will pass

The currency market has managed to calm down after the initial shock of Omicron’s discovery last Friday. AUD, MXN, and South African Rand all bounced back. Safe-haven currencies such as JPY weakened to 113.6690 per dollar. Last Friday, USDJPY reached 113.05 at one point, surging as much as 2%. Bitcoin has also edged higher, currently trading at 57,421.99, recovering from Sunday’s 1.5-month low at 53,308.93. Vaccine makers have reacted fast, saying that they will be able to reformulate the drugs in a short timeframe. This confirmation has offered traders much assurance.

In Germany, inflation surged more than expected in November. Prices increased at 6% on an annual basis. Gas rose by 5.2%, reaching the highest level since 1992. Elsewhere in the Eurozone, both Spain and Belgium have reported high inflation at 5.6%. The current Eurozone inflation level has far exceeded the 2% target, but ECB insists that the price pressure will not last long.