By Gina Lee

Investing.com – The dollar was down on Tuesday morning in Asia, just above a one-week low hit during the previous week, as concerns that the new omicron COVID-19 variant would derail the U.S. economic recovery and delay U.S. Federal Reserve interest rate hikes subsided.

By 11:07 ET (4:07 GMT), the index that measures the greenback’s value against other currencies had fallen 0.2% to 96.135 (0.21%). This index rose from Friday’s low of 95.973, when it saw its greatest one-day fall since May 2021.

This pair increased by 0.10% to 113.64

This pair increased by 0.08%, to 0.7146. The pair also increased by 0.06%, to 0.6828.

This pair fell 0.24% to 6.33720.

It climbed 0.07% up to 1.3321.

World Health Organization warns of “very high” infection risks from Omicron. Many countries are already increasing border security. The U.S. President Joe Biden stated that the U.S. will not remove lockdowns. This gave investors a slight boost.

Jerome Powell of the U.S. Federal Reserve still believes that inflation will fall over 2022, as supply and demand balances out. However, he added on Monday that the “recent rise in COVID-19 cases and the emergence of the omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.”

Omicron discovered that inflationary pressures might increase and could accelerate interest rate increases. However, investors initially resisted the Fed tightening monetary policy due to risk of growth.

“A less severe assessment of Omicron has allowed the dollar to recover some of its losses,” Westpac analysts stated in a note. However, “the somewhat underwhelming rebound in global markets suggests there is still an elevated level of concern about this variant.”

Continued strength in the U.S. economy will buoy the greenback, while the Australian dollar continues to look weak and a break below $0.7106 “just looks like a matter of time,” the note added.

After falling to $1.1186 for nearly 17 months, the euro was steady at $1.12955.