The dollar traded largely unchanged Thursday, with the safe haven Japanese yen more in demand as worries over the omicron Covid variant mounted, weighing on the South African rand and the Australian dollar.  At 2:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged marginally higher to 96.090, consolidating in the middle of its range over the past two weeks. EUR/USD fell marginally to 1.1315, GBP/USD climbed 0.2% to 1.3299, and USD/JPY rose 0.4% to 113.23, a recovery of sorts from Tuesday’s low of 112.53, a level not seen since Oct. 11. Additionally, the risk-sensitive AUD/USD rose 0.1% to 0.7110, not far from Tuesday’s low of 0.7063, its weakest since early November of last year, while USD/ZAR fell 0.3% to 15.9760, after a more than 1% surge overnight. “G7 FX volatility is at its highs for the year and it is not hard to see why,” said analysts at ING, in a note. “Over the last week news of the omicron variant has inserted a new and, as yet, unsized risk premium into global asset markets.” Adding to the concerns was the news late Wednesday that the U.S. recorded its first case of the omicron variant, while the number of new cases reported in South Africa, where omicron was first discovered, doubled from Tuesday to Wednesday with the new variant becoming the dominant strain, accounting for nearly three-quarters of cases. Much remains unknown about the new variant, which has spread to at least two dozen countries in around three weeks, but the World Health Organization said Wednesday that it expects to have more information on its transmissibility within days. However, Australia’s Chief Medical Officer Paul Kelly was quoted as saying there was no evidence to suggest it was more dangerous than the Delta variant. Elsewhere, GlaxoSmithKline (NYSE:GSK) said its antiviral treatment Sotrovimab, which has already been approved in the U.K., appears 79% effective against Omicron. The dollar should still receive some support after Federal Reserve Chair Jerome Powell reiterated during the second day of his testimony to Congress on Wednesday that the central bank is set to consider at its December meeting a faster tapering of its bond-buying program, which could lead to earlier interest rates hikes. Cleveland Fed President Loretta Mester indicated in an interview on Wednesday that she expects two 25 basis point hikes next year. The main U.S. economic data release scheduled for Thursday will be the weekly initial jobless claims, another indication of the health of the U.S. labor market. This follows ADP private payrolls rising 534,000 in November, less than in October but more than expected, and ahead of the much anticipated government jobs report on Friday. Elsewhere, USD/TRY rose 1.5% to 13.4581, with the lira trading near record lows, after President Recep Tayyip Erdogan abruptly replaced his finance minister, Lutfi Elvan, suggesting rifts within the administration over the policy of aggressive interest-rate cuts despite raging inflation.

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