Forex Today: Safe-haven flows dominate markets at the start of the week

Here is what you need to know on Monday, December 20:

With central bank meetings out of the way, risk perception is dominating the financial markets at the start of the week. The surging number of Omicron cases globally and heightened concerns over tightened restrictions triggered a flight to safety on Monday. There won't be any high-impact data releases featured in the economic calendar for the remainder of the day and market participants will keep a close eye on headlines surrounding the coronavirus.

Over the weekend, the Netherlands has announced that it will go into a strict lockdown for four weeks to limit the spread of the Omicron variant. On Sunday, British Health Secretary Sajid Javid told the BBC that tougher restrictions could not be ruled out before Christmas. Similarly, Germany’s Economy Minister Habeck noted that a full lockdown would not be required in Germany but they will need to impose additional restriction measures.

Meanwhile, Democratic US Senator Joe Manchin announced that he will not vote for US President Biden's Build Back Better Act, ending negotiations on the current version of the legislation. 

Reflecting the risk-averse market environment, China's Shanghai Composite Index lost more than 1%, the Nikkei 225 Index erased 2.13% and US stocks futures are down more than 1% in the early European session. The benchmark 10-year US Treasury bond yield is falling 2.8% at 1.366 and making it difficult for the greenback to build on Friday's gains. The US Dollar Index was last seen trading flat on the day at 96.62.

EUR/USD is moving sideways around 1.1250 on Monday. Last week, the pair fell 90 pips on Friday erased all of its weekly gains.

GBP/USD is trading in the negative territory early Monday and stays within a touching distance of 1.3200.

USD/JPY remains on the back foot as the JPY capitalizes on safe-haven flows.

The barrel of West Texas Intermediate (WTI) is down more than 3% at $68.20 amid the worsening demand outlook.

Gold rose sharply on Friday and registered its largest one-week gains since early November. As of writing, XAU/USD was consolidating its gains around $1,800.

Bitcoin continues to fluctuate in a descending trading channel and trades near $46,000. Ethereum is down more than 2% on Monday after failing to hold above $4,000 over the weekend.