The U.S. dollar has wiped off losses it suffered after news of the appearance of the omicron variant, which is spreading faster than the previous variant of the SARS-COV-2 delta virus. Indeed, it seems that omicron will not be as much of a danger to economic recovery as originally assumed.
The US dollar was strengthening slightly against a basket of major world currencies during this week. It notched up 0.15 percent on Thursday, gaining also against the euro and British pound. Indeed, investors have stopped worrying about the new variant of the SARS-COV-2 omicron virus, of which the first reports appeared less than two weeks ago.
But this is not about the only factor that has played the US dollar into the cards. Indeed, the US Commerce Department released foreign trade results for October, which took a positive surprise. Indeed, the trade deficit shrank by just under 18 percent compared to September, thanks largely to the rapid growth of US exports.
Last but not least, rising expectations of monetary policy tightening by the Federal Reserve have signed up to strengthen the dollar. There is growing belief among investors that the Fed will start raising interest rates next year to help reduce inflation. The latter has climbed to 30-year highs in recent months.