Risk-sensitive currencies fell in Asian afternoon trading, whilst safe havens made gains, as the CEO of Moderna said Covid vaccines will not likely be as effective against the new variant as with others.

"There is no world, I think, where (the effectiveness) is the same level…we had with Delta," Moderna CEO Stéphane Bancel told Financial Times.

The Australian Dollar fell 0.65% to a new year-low of $0.7093, whilst the New Zealand Dollar declined 0.6% to $0.6783, on track for its worst month since May 2015, Reuters reports.

The Yen rose 0.3% to 112.97 against the Dollar. Previously, Japan’s currency has lost ground, whilst the Aussie and New Zealand Dollars had made gains on indications Omicron may not be as severe as initially thought. However, the World Health Organization has cautioned of a "very high" risk of surges in the variant, with countries globally tightening border controls.

The Euro stood at $1.131 at the time of writing, whilst there was little change to the Pound at $1.3315. The Euro plummeted close to a 17-month low last week of $1.11864 as policy makers at the European Central Bank held on to their dovish stance.

Before the arrival of the Omicron variant, the principal driver of currency fluctuations stemmed from the speed at which central banks would withdraw stimulus and hike rates. Yet, Fed Chair Jerome Powell said the new variant may lead to longer-lasting inflation pressures.

Imminent Fed rate hikes had previously supported the greenback. "The Dollar weakness we saw on Friday shows that a lot of the Dollar strength was more a function of Fed thinking and Fed pricing. On any other day you would have expected the U.S. Dollar's safe haven credentials to have been prominent," according to Ray Atrill head of FX strategy at NAB.

The Dollar index – measuring the currency against six peers – was last trading at 96.075, nearing Friday’s lows of 95.973, the largest one-day fall since May.