The US dollar is up a bit today after hitting two-plus years low in the previous session. The worries over the US economic revival and the fiscal stimulus impasse continue to drag market sentiments.
The dollar touched new recent lows overnight as the Fed stimulus interventions continue to weaken the greenback, but kept pushing the equities higher.
The USD index was trading near 92.340, 0.15 Percent higher in Asia trade.
The euro was trading at 1.19305 dollars, after hitting its highest level since May 2018 in the previous day. The analysts are warning about stretched long positions, but the dollar selling is helping the EUR/USD to sustain the upward momentum.
The British Pound was trading at 1.3236 after easing from Tuesday’s eight-month high of 1.3241 dollars.
The nature of the US dollar has witnessed a marked shift, from the earlier position as a haven-linked currency, since the Fed started expanding its bond selling and funding of the coronavirus hit economy.
It could also be viewed as the increased demand for riskier assets compared to the safe-havens, as Fed-driven liquidity flooded the markets.
Analysts expect the US dollar weakening to continue gradually, but don’t believe a drastic fall is on the cards.
Also, the US Treasury returns might continue to remain low as the pandemic fight continues.
The fiscal stimulus bill passage got a new hope on Tuesday as US House of Representatives Speaker Nancy Pelosi indicated Democrats are ready to cut their version of stimulus bill size by half, to reach a middle-ground with the Republicans.
Separately, Japan reported a fall of 19.2 Percent in July exports compared to the same month last year. The core machinery orders fell 7.6 Percent in June from the previous month.
The US dollar was fetching 105.55 yen today.
The US session will focus on the minutes from July 28-29 FOMC meeting, due today. There are speculations that the Fed is inclined to keep inflation above two Percent for some time.
The Chinese Yuan is trading at 6.9165 against a dollar; it has hit a five-month high of 6.9246 on Tuesday.
The Aussie traded down 0.14 Percent near 0.72335 dollars while the Kiwi was flat at 0.6601 dollars.
