- Dollar index steady, euro recovers partly
- Australian dollar and Norwegian crown slump
LONDON, Dec 20 (Reuters) - Global investors favoured safe-haven currencies over risk-sensitive ones on Monday on concerns further curbs could be imposed in Europe to contain the Omicron variant, while the dollar was supported by the U.S. Federal Reserve's hawkish stance.
With last week's slew of major central bank meetings now out of the way, investors turned their focus to the rapid spread of the Omicron variant.
The Netherlands went into lockdown on Sunday and local newspapers in Italy reported that new restrictions are being considered there too.
"Investor risk sentiment has been undermined by further evidence over the weekend of the disruptive impact of the new Omicron COVID variant," MUFG currency analyst Lee Hardman wrote in a note to clients.
"The stricter lockdown in the Netherlands will heighten fears that similar measures will be adopted in other European countries in the coming weeks."
The Australian dollar, which is seen as a liquid proxy for risk appetite, was down 0.5% at $0.7091, having earlier hit its lowest in 13 days .
Britain's pound was down 0.2% at $1.3205 . British Health Minister Sajid Javid on Sunday did not rule out the possibility of further lockdowns before Christmas.
A slump in oil prices also hurt commodity-linked currencies. The Norwegian crown fell, with the euro up around 0.6% versus the crown .
A further hit to market sentiment came from uncertainty over U.S. President Joe Biden's domestic policy bill, known as "Build Back Better". A moderate Democrat who is key to passing the $1.75 trillion bill said on Sunday he would not support the package, citing concerns about inflation.
Goldman Sachs cut its U.S. growth forecasts and the U.S 10-year Treasury yield fell to its lowest since Dec. 6 on Monday.
The U.S. dollar index was at 96.598 at 0820 GMT, not far from last month's peak of 96.938, which was the highest since July 2020 .
Speculators' net long bets on the U.S. dollar, or bets that the dollar will rise, edged higher in the week to Dec. 14, reflecting a growing desire among market participants to hold the greenback.
Elsewhere, the euro was up 0.2% at $1.12575, only partly recovering after tumbling 0.8% on Friday after the European Central Bank took tentative steps to exit its pandemic-era stimulus.
China cut its lending benchmark rate for the first time in 20 months to prop up its slowing economy, sending the yuan to a 10-day low.
Meanwhile, cryptocurrencies bitcoin and ether were on track for their second consecutive day of declines. Bitcoin was around $46,478.09, having fallen far below the all-time high of $69,000 it reached in November .
Reporting by Elizabeth Howcroft; Editing by Ana Nicolaci da Costa