LONDON—The dollar index was steady and riskier currencies picked up on Tuesday, as traders bet that the Omicron variant of COVID-19 would not be as severe as previously expected. Asian shares staged a recovery overnight and oil prices climbed as risk appetite improved following reports in South Africa earlier in the week saying that Omicron cases there had only shown mild symptoms. On Sunday, the top U.S. infectious disease official, Anthony Fauci, told CNN “it does not look like there’s a great degree of severity” so far. “The generally oversold commodity FX segment is likely experiencing a big short-squeeze as the market’s fears on Omicron are abating,” wrote ING strategists in a client note. The Australian dollar led gains on Tuesday, up 0.6 percent at $0.70915 at 0902 GMT following the Reserve Bank of Australia meeting, extending gains from Monday when it had its best percentage gain in seven weeks. …