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Yen rallies, rand sinks as new COVID variant spurs flight to safety

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Yen rallies, rand sinks as new COVID variant spurs flight to safety

TOKYO (Reuters) - The safe-haven yen rallied and the South African rand tumbled on Friday as investors turned cautious after Britain raised the alarm over a newly identified coronavirus variant spreading in the African nation.

The yen leapt as much as 0.56% to 114.68 per dollar, while the rand slumped to a more than one-year trough at 16.17 per dollar as concern flared about the B.1.1.529 variant, which might make vaccines less effective.

The risk-sensitive Australian dollar slid as much as 0.33% to a three-month low of $0.71265, ignoring a much-better-than-expected climb in retail sales.

"COVID worries are definitely playing a role in increasing demand for safe havens including the yen, and because South Africa is the location of this new variant, that's an obvious reason to avoid the rand," said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.

The British pound slipped to a new 11-month low of $1.3305.

Meanwhile, the euro rose 0.12% to $1.12185, stabilising after hitting its lowest level in nearly 17 months earlier in the week at $1.1186. Germany is considering following Austria's lead and reimposing a COVID-19 lockdown with the continent once again the epicentre of the pandemic.


Updated : 2021-12-07 05:45 GMT+08:00