The dollar weakened Wednesday ahead of Fed's meeting 

Dollar Calms After Dropping

The dollar index (DXY) follows the dollar against a basket of half a dozen progressive economy countries. By 3:30 AM ET (0830 GMT) it was effectively untouched at 96.06. Moves in all the major currencies were also insignificant. The euro was up smaller than 0.1% at $1.1347, and the pound was up a comparable amount at $1.3412.

Nevertheless, the dollar has lost between 1% and 1.5% this week against sterling and the Canadian, Australian, and New Zealand dollars. It also lost almost 1% against the euro, as scientific data has trickled out indicating that the latest wave of the epidemic will be less economically dangerous than previous ones. The only notable progress it has made has been against other haven currencies, like the Japanese yen and the Swiss franc.

Economic Disruptions Are Unlikely

Data published on Thursday revealed that sustained inflationary pressure in the U.S. wasn’t enough to disturb the broader optimism. A growing body of proof indicated that the Omicron variant of coronavirus is less likely than all prior dominant strains to lead to serious illness. The more guarantee goes in that direction, the less likely troubles to economic life will become.
Trading has now all but open ahead of the Christmas holiday period, but markets stay at least formally open.

As has been the case all week, the most competent moves are in the Turkish lira. Its rally in reaction to President Recep Tayyip Erdogan’s tries to stop dollar hoarding now seems to be running out of steam. From a high of around 18 lire last week, the dollar slipped as soft as 10.1565 on Thursday. However, afterward, it found ground again. By 3:30 AM ET, it changed at 11.6279, up 3.6% on the day.

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