By Gina Lee

Investing.com – The dollar was up on Monday morning in Asia the U.S. Federal Reserve signaled an earlier interest rate hike of March 2022, while Europe grapples with surging Omicron.

By 10:44 ET (03:44 GMT), the that monitors the greenback against other currencies increased 0.03% to 96.573

This pair fell 0.13% to 113.52.

This pair dropped 0.08 to 0.7118. The pair also fell 0.16 to 0.6726.

Both the pair grew by 0.06% to 6.3786, and fell by 0.11% at 1.3227.

Last week key central banks made their policy decisions. The latest decision was hawkish. To speed up asset tapering, the central bank plans to close it in March 2022. It also expects three quarter point rate increases that year.

It raised interest rates by 0.25 percent as it issued its policy determination, which was unexpected considering it had made its decision on Thursday. It also stated plans for asset tapering in the coming quarters.

On Friday, Fed Governor Chris Waller said the central bank might raise interest rates “shortly after” the completion of bond purchases in March 2022.

“Waller gave the (dollar index) a tailwind on Friday. Positioning is skewed long in USDs, so the prospect of position squaring into year-end is elevated, while central bank actions are the real issue, headlines on omicron could be seen as the smoking gun for position squaring.” head of research at brokerage Pepperstone in Melbourne Chris Weston, said in a note.

On the COVID-19 front, U.S. President Joe Biden’s top medical adviser Anthony Fauci said a shutdown will not be necessary despite COVID-19 surges again.

European countries are placing more restrictions due to the escalating number of Omicron-related cases. After detecting 12,000 Omicron cases last Sunday, the U.K. warns that more restrictions could be in place by Christmas. The Netherlands is already in lockdown.