FOREX-Euro Gains On More Positive Global Outlook; Turkish Lira...

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LONDON, Dec 22 (Reuters) - The euro, Australian dollar and other currencies recovered against the U.S.
dollar as traders turned more positive about the economic outlook on Wednesday, even as Omicron cases rocketed and investors braced for more volatility.

Turkey's lira steadied and held its recent gains after a rollercoaster ride in which it charged back from record lows due to President Tayyip Erdogan's new steps to guard Turks' savings against volatility.

Foreign exchange moves were largely small, with trading volumes thinner ahead of the holiday season.

After weakening earlier in the session, the euro was last up 0.1% at $1.13.

The Australian dollar lost as much as 0.4% to $0.7121 and the New Zealand dollar as much as $0.6742, but both were up slightly by 1115 GMT, supported by improving risk sentiment as oil and global shares advanced.

Sterling gained 0.3% to $1.3316, despite data showing Britain's economy grew more slowly than previously thought in the July-September period.

The dollar index edged 0.1% lower to 96.317, though it was still well within its recent ranges.

The weeks on either side of Christmas are typically low in volatility for currencies and other asset classes, analysts at ING said, though "this year some seasonal tendencies will be mixed with the Omicron variant threatening to force new restrictions and markets still processing a week full of key central bank decisions."

Omicron continues to keep traders on edge and infections are multiplying across Europe, the United States and Asia, causing countries across the globe to consider new curbs on movement and reimpose quarantine periods for incoming visitors.

But markets are growing confident the economic fallout from Omicron will be limited.

In emerging markets, Turkey's lira steadied after closing up 6% on Tuesday, having been down as much as 8.6% and up as much as 18.5%.

It was last down around 1.4% at 12.57 per dollar, but holding most of its gains after the government move to safeguard deposits.

"The policy action has been described as like as rate hike for retail deposits. However, it will transfer foreign currency risks onto the government´s balance sheet," said Lee Hardman, an analyst at MUFG.

He added that the plans would be unlikely to "buy the government much time before the lira resumes it decline unless there is fundamental shift to tighter policy settings to restore stability."

(Reporting by Tommy Wilkes; Editing by Frank Jack Daniel and Alexander Smith)