Sharjah24 – Reuters: The dollar inched higher at the start of a busy week of central bank meetings, including at the Federal Reserve, which are expected to drive currency markets and help the dollar, although concerns about the coronavirus weigh heavily on traders' minds.

The pound lost 0.16% to $1.3257 after British Prime Minister Boris Johnson said on Sunday that Britain faces a "tidal wave" of the Omicron variant of coronavirus and that two vaccine doses will not be enough to contain it.

The euro slipped 0.17% to $1.1292, while the greenback gained 0.1% on the yen to 113.5.

Moves were muted, however, compared with the last two weeks when news of the new coronavirus variant caused sharp swings in currencies along with other major asset classes.

Investors initially rushed into safe-haven assets, although reports that Omicron may not be as bad as feared caused these flows to reverse last week.

Investors now expect the Fed to signal a faster tapering of asset buying this week, and thus an earlier start to rate hikes. It will also update the dot plots for rates over the next couple of years.

The market is already well ahead, with a rise to 0.25% fully priced in by May.

If the Fed does as expected it would likely support the dollar, particularly versus currencies whose central banks will likely be slower to tighten.

Both the European Central Bank and the Bank of Japan will review their policy settings this week. A Reuters poll of ECB-watchers predicts it will halve the amount of assets it buys each month from April, but that an interest rate rise is years away.

Bitcoin was trading a little under $50,000, off 2% on the day after climbing over the weekend. But the world's largest cryptocurrency still has work to do to reclaim November's record high of $69,000.