The dollar was up on Tuesday morning in Asia as market expectations for a rate hike from the US Federal Reserve and concerns over the rise of the COVID-19 omicron variant.
The Dollar Index that tracks the greenback against a basket of other currencies rose 0.12% to 96.390 by 12:05 AM ET (05:05 AM GMT).
USD/JPY inched 0.02% to 113.59.
AUD/USD fell 0.34% to 0.7104 and NZD/USD gained 0.14% to 0.6744.
USD/CNY inched 0.04% to 6.3653 and GBP/USD down 0.11% to 1.3202.
The Fed, European Central Bank, Bank of England and Bank of Japan, are among about 20 central banks making their respective policy decisions this week.
The Fed will begin its two-day monetary policy meeting later in the day and make a policy decision on Wednesday. The central bank is expected to quickly accelerate its shrinking program, and investors will be looking for clues about when to raise rates in 2022.
Investors are now anticipating another rate hike in June 2022, and another in early November of that year.
“Even if the Fed merely meets the market's rate hike expectations, it is still ahead of the ECB, who are looking to maintain dovish policy after the Fed is dovish,” Westpac analysts said in a note. The Pandemic Emergency Purchase Program (PEPP) will end in March 2022.”
The European Central Bank and the Bank of England will adopt their policy decisions on Thursday, and the Bank of Japan will make a decision a day later.
The European Central Bank is expected to confirm the halt of its 1.85 trillion EUR ($2.08 trillion) pandemic emergency stimulus program in March 2022 during this week's meeting.
Meanwhile, with the first death in the UK linked to omicrons, according to Prime Minister Boris Johnson, the possibility of the Bank of England raising interest rates is dwindling. In Asia Pacific, China reported its first imported case of omicrons.
In crypto, bitcoin has rallied around 1% to climb from Monday's low of $45,750.
