FOREX-Dollar recovers in face of Omicron; commodity currencies slide

* Dollar index gains 0.1%
* Yen strengthens against dollar to 112.805
* Loonie, Aussie and kiwi slide

(Updates prices, market activity, adds analyst comment)
By David Henry
NEW YORK, Dec 1 (Reuters) - The U.S. dollar recovered from a
loss on Wednesday after reports the Omicron coronavirus variant
is spreading and oil prices turned down, hurting commodity
currencies.
The dollar index against major currencies was up 01% in the
afternoon in New York after having fallen 0.3% in the morning.
The greenback gained against the dollars of Canada, Australia
and New Zealand and against the euro and British pound.
"What you are seeing is a classic risk-off move in FX
markets and that means the dollar outperforms against the
commodity currencies," said Erik Bregar, an independent foreign
exchange analyst.
The dollar lost to the Japanese yen currency, which is often
seen as a safer haven, giving up 0.3% to 112.805.
The shifts underscored the hour-to-hour fragility of foreign
exchange rates as traders weigh what the Omicron variant might
do to plans that Federal Reserve Chair Jerome Powell signaled on
Tuesday to move more quickly to raise U.S. interest rates.

The variant is becoming dominant in South Africa and has
appeared in the United States.
"We've gotten these conflicting claims about the new
variant, and Powell's comments really threw the markets for a
loop," said Marc Chandler, chief market strategist at
Bannockburn Global Forex.
"People are still pretty nervous," Chandler said.
The dollar's rebound started as a report from the Institute
for Supply Management came out showing that U.S. manufacturing
activity picked up in November amid strong demand for goods,
keeping inflation high as factories continued to struggle with
pandemic-related shortages of raw materials.
An earlier report on U.S. private payrolls suggested that
Friday will bring a "solid jobs report" when the government
posts more comprehensive payroll numbers, Chandler said.

"Friday's U.S. jobs data is the next big thing," he said.
The greenback is up nearly 7% this year. November was its
strongest month since June.
The euro lost 0.2% on the day to $1.1314 at 3:21
pm ET (1507 GMT).
The British pound, often considered a risk-on
currency, fell back 0.2% against the dollar after having been up
0.4%. The pound is struggling to recover after reaching its
lowest level in nearly a year earlier this week on fears over
vaccine effectiveness against the Omicron variant.
The Australian dollar lost 0.4% to $0.7103 and the
New Zealand dollar lost 0.3% to $0.6805.
Prior to the tailspin caused by Omicron's advent, the main
driver of exchange rates had been expectations of the different
speeds at which central banks will raise interest rates.
In cryptocurrencies, bitcoin was up less than 1% at $57,220
at 3:17 pm ET (2017 GMT).
========================================================
Currency bid prices at 3:21PM (2021 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 96.0650 95.9710 +0.11% 6.761% +96.1380 +95.6710
Euro/Dollar $1.1314 $1.1336 -0.18% -7.38% +$1.1360 +$1.1303
Dollar/Yen 112.8050 113.1450 -0.30% +9.18% +113.6200 +112.6750
Euro/Yen 127.62 128.30 -0.53% +0.55% +128.7800 +127.5800
Dollar/Swiss 0.9205 0.9184 +0.25% +4.07% +0.9217 +0.9170
Sterling/Dollar $1.3270 $1.3298 -0.19% -2.85% +$1.3352 +$1.3271
Dollar/Canadian 1.2825 1.2777 +0.38% +0.71% +1.2828 +1.2712
Aussie/Dollar $0.7103 $0.7132 -0.38% -7.64% +$0.7173 +$0.7105
Euro/Swiss 1.0415 1.0413 +0.02% +0.00% +1.0433 +1.0405
Euro/Sterling 0.8524 0.8523 +0.01% +0.00% +0.8527 +0.8494
NZ $0.6805 $0.6824 -0.26% -5.22% +$0.6867 +$0.6806
Dollar/Dollar
Dollar/Norway 9.1105 9.0345 +0.44% +5.68% +9.1110 +9.0120
Euro/Norway 10.3115 10.2457 +0.64% +0.00% +10.3125 +10.2070
Dollar/Sweden 9.0783 9.0200 +0.42% +10.76% +9.0787 +8.9951
Euro/Sweden 10.2717 10.2286 +0.42% +0.00% +10.2729 +10.2000


(Reporting by David Henry in New York; Additional reporting by
Joice Alves and Elizabeth Howcroft in London; Editing by
Jonathan Oatis and Andrea Ricci)