By Alun John

HONG KONG, (Reuters) – The dollar hovered just below its recent highs Tuesday after losing ground overnight due to a hit on Democratic spending plans from Washington. However, worries over the Omicron coronavirus variant helped keep risk currencies under control.

Last at 96.513 was the, which compares the currency to six major peer currencies. The euro and the Japanese have lost ground.

Shortly after U.S. Federal Reserve made it possible to increase interest rates by up to 35% in 2022 and investors began to fear the Omicron strain, the greenback briefly touched 16-month highs of 96.914 this week.

It pulled back Monday and finished the session 0.12% lower than U.S. Sen. Joe Manchin (a moderate Democrat, who was key in President Joe Biden’s efforts to pass a domestic investment bill worth $1.75 trillion – also known as Build back Better – stated on Sunday that he wouldn’t support the package.

The dollar fell on the collapse of Build Back Better. According to Kyle Rodda (an analyst at IG Markets), less stimulus and weaker growth combined with rates falling at the short end was sufficient to push the dollar slightly lower.

The yield curve steepened on Monday as the two-year U.S. Treasury yields fell to 0.5870%. This is their lowest level since Dec. 3. [US/]

Pound was down at $1.3204 on Monday after Boris Johnson, British Prime Minister said that he would increase coronavirus controls to reduce the spread of Omicron variant.

Omicron infection, which is rapidly increasing in Europe and the United States and doubles every two to three days in London, caused a dramatic sell-off of oil as well as share prices on Monday. [MKTS/GLOB]

However, in a sign that there is uncertainty, both Nasdaq (and both) climbed Tuesday in early Asia.

At $0.71055, the dollar was weak, while New Zealand’s dollar tested 13-month lows at $0.6709.

On Monday it was volatile, by normal standards. It fell 10% in the beginning, then rose to 20% at the end. President Tayyip Turkey introduced several steps that would reduce the burden of the currency’s weakness on Turks.

He also promised to keep pushing for a low rate policy, which was what caused the slide in the lira.

The market was quiet with just $47,000, despite trending down for the last few days.

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Prices for currency bids at 0039 GMT

Description U.S. Close RIC Pct Change Pct High Low Bid

Prior Change

Session

Euro/Dollar $1.1275 $1.1274 +0.02% -7.71% +1.1278 +1.1274

Dollar/Yen 113.6550 113.6400 -0.02% +10.00% +113.6700 +113.6200

Euro/Yen 128.16 128.11 +0.04% +0.98% +128.2000 +128.1200

Dollar/Swiss 0.9216 0.9214 +0.06% +4.21% +0.9219 +0.9210

Sterling/Dollar 1.3204 1.3210 -0.05% -3.35% +1.3211 +1.3204

Dollar/Canadian 1.2935 1.2944 -0.06% +1.59% +1.2944 +1.2934

Aussie/Dollar 0.7107 0.7110 -0.04% -7.61% +0.7111 +0.7102

NZ 0.6707 0.6716 0.663% +0.6714 +0.6705

Dollar/Dollar

All locations

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Volatilities

Tokyo Forex Market Information from BOJ