© Reuters.

By Peter Nurse

Investing.com – The dollar traded marginally lower early in the European session Thursday, near a one-week low, amid growing optimism for the global economic outlook despite the surge of Omicron-variant Covid cases. 

At 2:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 96.043, having earlier fallen to 96.018 for the first time since Dec. 17.

rose 0.1% to 114.19, with the yen, another safe haven, slipping despite Japan upgrading earlier Thursday its growth projections for the next fiscal year starting in April.

The growth projection was raised to 3.2% for fiscal 2022 from a forecast 2.2% real GDP growth seen at a mid-year review in July. This would be the fastest growth since fiscal 2010.

rose 0.1% to 1.1338, adding to its overnight advance, climbed 0.1% to 1.3354, while the risk-sensitive rose 0.1% to 0.7218, after Wednesday’s surge of almost 1%.

Risk sentiment has improved as the week has progressed, helped by a couple of studies suggesting that patients with the Omicron variant face a lower risk of hospitalization and severe disease compared with the Delta variant, the previously dominant strain.

Also helping was the release of positive U.S. economic data on Wednesday, with growing 2.3% quarter-on-quarter in the third quarter and rising 1.9% in November. However, it was U.S. improving more than expected in December despite the resurgence in Covid-19 infections which had the biggest impact.

“Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased,” said a Conference Board spokeswoman.

The economic data slate is packed Thursday, including , , , and the . It also includes and , as well as the University of Michigan and indexes.

Elsewhere,  dropped 1.8% to 11.8270, with the lira continuing to rebound after President Recep Tayyip Erdogan said Wednesday that measures to protect the Turkish lira bank deposits from depreciation amid a currency crisis have achieved their goal.

That said, the currency is still about 40% down so far this year after a series of interest rate cuts, engineered by the president, despite inflation soaring over 20%.

Elsewhere, the Russian rose to its highest level in over a month ahead of President Vladimir Putin’s annual press conference, against a backdrop of continued tension on the Ukrainian border, where over 100,000 Russian troops have massed. Analysts will want to see whether Putin repeats to a more general audience the hawkish comments that he made to his defense chiefs earlier in the week.

 

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