Forex Today: Dollar takes break from Delta, Fed worries, cryptos climb, oil extends falls

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Markets have returned to a risk-off mood, mostly driven by rising covid cases in the US, Germany, Japan and other places. However, the dollar has stabilized, consolidating gains from previous days. Speculation about Fed tightening remains prevalent. Cryptocurrencies are holding onto high ground and oil extends its falls.

The Delta COVID-19 variant continues spreading rapidly in the US, overwhelming hospitals in some southern states and infecting three vaccinated US Senators. Worries about the rising death toll and the fact that the White House opted to open booster shots to all ages is causing concerns. 

The dollar has been consolidating its gains driven by Delta and also by the Federal Reserve's move toward a tapering announcement as early as September. Fed Chair Jerome Powell is scheduled to speak on Friday, August 27, during market hours. 

When is a taper not a rate hike? Whenever the Fed says so

EUR/USD is struggling below 1.17 as Germany reported the highest number of daily coronavirus cases in three months. The locomotive of the eurozone also saw producer prices rise at a faster rate than expected. 

USD/JPY is under pressure below 110 as the yen receives safe-haven flows amid rising cases in Japan. China contributed to the damp mood by tightening its screws on tech companies with a new data distribution law. Moreover, the central bank refrained from cutting its interest rates. 

AUD/USD is struggling to hold onto 0.71 after restrictions in Sydney were tightened. Investors shrugged off Thursday's upbeat Australian jobs report. NZD/USD is battling 0.68 after New Zealand identified additional covid cases and extended its nationwide lockdown. 

Canada is set to report retail sales figures later in the day. USD/CAD is nearing 1.29 due to dollar strength and the tumbling down of oil prices. WTI is hovering below $64 at the time of writing. 

Cryptocurrencies have been consolidating their gains early on Friday with Bitcoin holding above $47,000 and Ethereum clinging to $3,200. 

More: Federal Reserve July Minutes: Tapering is a rate hike