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The dollar rose in Asia on Monday morning. Uncertainty surrounding the Omicron COVID 19 variant and expectations of rising US inflation data is putting pressure on interest rates.

The US dollar index, which tracks greenbacks against baskets of other currencies, rose 0.16% to 96.270 by 11:28 pm (4:28 AM GMT).

USD/ JPY rose 0.17% to 113.

AUD/ USD rose 0.30% to 0.7022 and the Reserve Bank of Australia announced its policy decision on Tuesday.

The NZD / USD pair rose 0.28% to 0.6758.

The USD / CNY fell 0.11% to 6.3689 and the GBP / USD pair rose 0.03% to 1.3236. The antipodal currency, which is at higher risk than, attempted to rebound early in the session, with the help of preliminary observations from South Africa suggesting that patients with Omicron had relatively mild symptoms.

ANZ Bank analysts suggested that “maybe we should look for volatility rather than trends.” Volatility meters for the Australian and New Zealand dollars reached their highest levels in about eight months on Friday.

Omicron has reached about one-third. Research on this variant is ongoing, but according to an article from the South African Medical Research Council, the majority of COVID19 patients were hospitalized for other reasons and were dependent on oxygen.

Treasury markets have also been volatile in recent sessions, with the U.S. yield curve flattening sharply over expectations that the U.S. Federal Reserve will move too quickly to curb inflation and eventually impact long-term economic growth.

Friday`s mixed job report also reinforced views of quicker Fed asset tapering. The consumer price index figure due later in the week is also expected to support the view and give the dollar a boost.

Interest rate futures markets have priced U.S. interest rate hikes around mid-2022, but only reaching as high as around 1.5% in late 2026 and investors remain wary of that changing quickly.

“This is a tough one to reconcile. This suggests that the market is seeing the Fed stop raising rates after it has raised rates five times. This is well below the Fed’s median forecast. It’s higher, “Weston said.