US dollar trades sideways

US dollar in calm waters

Currency markets are in holiday mode and will likely remain so until the middle of next week. The lack of data releases globally continued although the second-tier data from the US continued to be positive. The Case-Shiller House Price Index and US House Price Index releases rose as expected, while the Redbook activity report rose to 21.40% for December YoY, and the Richmond Fed Manufacturing Index and Dallas Fed Services Index both beat expectations.

Although omicron cases in the US and Europe amongst others, continue to surge, it has yet to make its presence felt negatively in economic data. Europe’s restrictions will have a tail impact but, for now, markets are overwhelmingly pricing in the latest variant as a milder incarnation, despite its easier contractibility. With market activity much reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole.

The dollar index is barely changed at 96.15, marking four days of sideways trading. The US dollar still looks vulnerable to positive headlines on the virus front. Support remains between 95.80 and 95.85, with resistance at 96.30 initially.

Major currencies continue to tread water with EUR/USD at 1.1310, GBP/USD at 1.3435, USD/JPY at 114.80, AUD/USD at 0.7225, NZD/USD at 0.6810 and USD/CAD at 1.2820. Of that group, USD/JPY and GBP/USD look most interesting. USD/JPY is grinding higher on rate differentials and a higher oil price, while sterling looks to be catching an omicron tailwind as cases remain high, but hospitalisations low.

Asian currencies have performed well this week, backstopped by a firm Chinese yuan. The Malaysian ringgit, Indonesian rupee and Indonesian yupiah have all performed very well as receding omicron fears sees hot money move quietly back into the 2022 global recovery story.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes.

He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays.

A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others.

He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)