By Gina Lee
Investing.com – The dollar was down on Thursday morning in Asia as optimism about the global economic outlook whetted investors’ risk appetite. However, the continuous, rapid spread of the omicron COVID-19 variant remains a concern.
The US Dollar Index that tracks the greenback against a basket of other currencies inched down 0.03% to 96.028 by 11:09 PM ET (4:09 AM GMT).
The USD/JPY pair inched up 0.02% to 114.13.
After being rattled by omicron’s spread and ensuing government restrictions earlier in the week, risk sentiment has improved. A South African study showed that patients with the omicron variant have reduced risks of hospitalization and severe disease compared with the delta variant.
Also contributing to improved sentiment, Pfizer Inc.’s (NYSE:PFE) COVID-19 antiviral therapy, Paxlovid, received emergency use authorization from the U.S. Food and Drug Administration on Wednesday.
On the data front, Wednesday’s data from the U.S. showed that the GDP grew 2.3% quarter-on-quarter in the third quarter of 2021. Existing home sales were at 6.46 million for November and the Conference Board Consumer Confidence index was at 115.8 for December.
More data is due later in the day, including initial jobless claims, new home sales, durable goods orders, and the PCE price index. It also includes personal income and spending, as well as the University of Michigan consumer sentiment and Michigan Consumer Expectations indexes.
Central banks are also tightening monetary policy, with the U.S. Federal Reserve adopting a hawkish tone at its latest policy meeting.
“Ongoing data strength should help bolster Fed pricing, particularly amid reports that omicron appears to be leading to fewer hospitalizations,” TD Securities analysts said in a report.
The Bank of England also raised its interest rate to 0.25% in its latest policy decision last week. However, the surprise move has “offered only some time-limited support to the pound, but the fast spread of the omicron in the U.K. may keep some pressure on the pound around Christmas, in particular as the government may opt to impose some new restrictions,” ING said in a recent note.
Dollar Down, Omicron Fears Counter Brighter Economic Outlook
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