By Gina Lee
Investing.com – The dollar was down on Tuesday morning in Asia, remaining below its recent high. A blow to U.S. President Joe Biden’s investment bill, as well as concerns about the omicron COVID-19 variant, also capped gains for riskier currencies.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.05% to 96.465 by 9:20 PM ET (2:20 AM GMT).
The USD/JPY pair inched up 0.10% to 113.69.
The AUD/USD pair inched up 0.08% to 0.7115, with the Reserve Bank of Australia releasing the minutes from its latest meeting earlier in the day. In the minutes, the central bank said that beginning asset tapering at its first meeting of 2022 and ending it in May is consistent with existing forecasts, an upbeat view of the economy.
The NZD/USD pair edged up 0.20% to 0.6726.
The USD/CNY pair inched down 0.03% to 6.3740 and the GBP/USD pair inched up 0.03% to 1.3211.
The U.S. currency briefly approached 16-month highs at 96.914 during the past week, reacting to the U.S. Federal Reserve’s hawkish pivot in its latest policy decision. Omicron concerns also gave the safe-haven asset a boost.
However, U.S. Senator Joe Manchin’s comments on Sunday that he will not support Biden’s Build Back Better package, a $1.75 trillion domestic investment bill, saw the dollar finished Monday’s session down 0.12%.
"The dollar pulled back on the breakdown of Build Back Better. Less stimulus, weaker growth, and rates dropping at the short-end were enough to push the dollar slightly lower," IG markets analyst Kyle Rodda told Reuters.
Two-year U.S. Treasury yields hit 0.5870% on Monday, their lowest level since Dec. 3.
The pound was also on a downward trend after British Prime Minister Boris Johnson said on Monday that he would tighten restrictive measures to curb omicron’s spread if needed. The variant is spreading rapidly in Europe and the U.S., accounting for 73% of all sequenced U.S. cases, according to federal estimates.
Meanwhile, the Turkish lira had a volatile day on Monday, falling as much as 10% before ending the session up over 20%. The currency got a boost after President Tayyip Erdogan introduced measures that he said would ease the impact of the weakened currency.
However, Erdogan also vowed to continue with a low-rates policy that had led to the lira's slide in the first place.