Forex News: Risk aversion boosts the US Dollar

The US Dollar keeps its footing versus its key competitors in the second half of the week, according to data released on December 29. After ending the previous two days in positive territory, the US Dollar Index remains close to 104.50, and on Thursday morning in the early European session, US stock index futures traded in a mixed manner. The US economic docket will include information on weekly initial jobless claims and crude oil inventory levels. Market participants will closely monitor developments related to the crisis between Russia and Ukraine and the coronavirus issue in China.

The major Wall Street indices turned negative and sustained significant losses late on Wednesday, which helped the safe-haven US Dollar. While the rest of the world seeks to impose further limitations on Chinese travelers, China continues to inch closer to a full reopening. Beginning January 5, the US will demand that all visitors from China present results of a COVID test that are negative. Similar to Italy, which revealed that half of the travelers arriving in Milan carried COVID, the country said it will start testing all arrivals from China. The UK is anticipated to evaluate the situation and make a decision regarding the restriction of nonstop flights from China.

On Wednesday, the EUR/USD fell again around 1.0600 and ended the day in the red. Early on Thursday, the two remain relatively silent just above that level. The European economic docket will include information on the M3 Money Supply and Private Loans.

Despite small losses for the second straight day, GBP/USD managed to stay above 1.2000 on Wednesday. The pair was slightly higher on the day at about 1.2020 at the time of publication.

The USD/JPY pair changed course during Thursday's Asian trading hours after ending the first three days of the week in the green. According to Reuters, the Bank of Japan bought bonds without a plan for the second day in a row. At 133.80, the pair was last spotted down 0.5% for the day.

After rising on Tuesday, the price of gold continued to decline on Wednesday due to risk aversion. However, despite the benchmark 10-year US Treasury bond yield dropping close to 1% to approximately 8.5% early on Thursday, XAU/USD doesn't seem to be having much trouble maintaining its position above $1,800.

Before entering a consolidation phase near $16,500 early on Thursday, Bitcoin fell almost 1% for the second straight day on Wednesday. On Wednesday, Ethereum dropped close to 2% and finished under $1,200. At $1,190, ETH/USD was last spotted trading somewhat higher than usual for the day.