* Dollar index up 0.3%* Investors await U.S. inflation data(Updates to U.S. afternoon)By Saqib Iqbal AhmedNEW YORK, Dec 9 (Reuters) - The U.
* Dollar index up 0.3%
* Investors await U.S. inflation data
(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, Dec 9 (Reuters) – The U.S. dollar rose against a
basket of currencies on Thursday as increased restrictions in
parts of the world to contain the spread of COVID-19, including
the new Omicron variant, tempered investors’ appetite for
riskier currencies.
The U.S. Dollar Currency Index was up 0.3% at 96.233.
“We are seeing some caution in the markets because of
Omicron. I think the worry that it would be worse than Delta has
waned but the reports about how easily transmissible the strain
is have caused extra caution,” said John Doyle, vice president
of dealing and trading at FX payments firm Tempus Inc.
“There are worries about how governments could react, and
the UK’s ‘Plan B’ is a great example.”
British Prime Minister Boris Johnson on Wednesday imposed
tougher COVID-19 restrictions in England, ordering people to
work from home, wear masks in public places and use vaccine
passes to slow the spread of the new variant.
Johnson said Omicron was spreading rapidly and he had no
choice but to move to “Plan B” while a vaccine booster program
is accelerated.
“Risk is off for the first time this week so the greenback
is up against the entire G10 except for the safe-haven yen,”
Doyle said.
The dollar was 0.2% lower against the Japanese yen.
The greenback was supported by data that showed the number
of Americans filing new claims for unemployment benefits dropped
to the lowest level in more than 52 years last week as labor
market conditions continued to tighten amid an acute shortage of
workers.
Investors were also awaiting U.S. inflation data on Friday
that could set the tone for the Federal Reserve’s strategy on
interest rate hikes.
“I think we are seeing some position-squaring ahead of the
CPI data tomorrow and the various central bank meetings next
week,” Doyle said.
With the U.S. Federal Reserve, European Central Bank and
Bank of England among those meeting to discuss monetary policy
next week, investors will be watching for forward guidance,
especially from the Fed. Some analysts expect a faster unwinding
of pandemic-era stimulus plans.
On Thursday, China’s yuan pulled back from a
3-1/2-year high and was set for its biggest drop in more than
four months after the central bank raised foreign currency
reserve requirements.
The pound held steady, just above a 2021 low hit on
Wednesday when the “Plan B” restrictions were announced.
Bitcoin lost 6.1% to $47,562.34, struggling to find a
footing after rebounding from a sharp weekend plunge.
(Reporting by Saqib Iqbal Ahmed; Editing by Dan Grebler)
www.lse.co.uk