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Title: Dollar Down as Fading Omicron Fears Boost Investor Risk Appetite

Dec 23, 2021 11:00PM ET

By: AnalysisWatch

The dollar weakened in Asia on Friday morning as investors fled to riskier assets, while fears of contagion from the omicron COVID-19 variant continued to ease.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, fell 0.02% to 96.035 by 10:52 PM ET (3:52 AM GMT).

The USD/JPY fell 0.03% to 114.35 after Japan's cabinet approved a record-breaking first budget for the year beginning April 2022. According to the Japanese Finance Ministry, Japan plans to spend a total of 107.6 trillion ($941.26 billion) in the year ending March 2023, up 0.9% from the current year's initial budget.

Meanwhile, data released earlier in the day showed that Japan's national core consumer price index rose 0.5% in November from a year earlier.

The AUD/USD pair fell 0.13% to 0.7232 and the NZD/USD pair fell 0.14% to 0.6815.

The USD/CNY pair rose 0.01% to 6.3702 after the People's Bank of China set the yuan at a weaker-than-expected 6.3692 per dollar for the 15th consecutive session on Friday. Since surveys began in 2018, this is the longest period of lower-than-expected yuan fixings based on when the rate was even a fraction below the estimate.

The GBP/USD pair was up 0.03% at 1.3409.

Turnover was light ahead of the holidays as US markets were closed and other markets, such as Hong Kong, ended the trading day early.

Investors were pleased on Thursday with the approval of molnupiravir, the COVID-19 pill from Merck & Co., by the US Food and Drug Administration.

A British study saying Omicron infections were less likely to lead to hospitalization also buoyed spirits. However, the study added that the variant can still cause a significant number of severe cases due to its infectivity.

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