Remember the USD smile theory? Well sometimes the USD has different drivers at different times. See here for one article I have written on this.
Right now the USD is being driven by US yields. Over the last few days yields had been driven higher by faster Fed tapering expectations. This was fuelled by Clarida's and then Daly's comments. Now the variant news hits folks think this may halt the Fed taper timetable. Look at Fed fund futures and you can see that rate hike expectations are tumbling now.
This hits yields, this weakens the USD. This is a yield driven story and why the USD is weak.