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The dollar fell against most of its peers on Thursday amid fading hopes for a compromise between Republicans and Democrats over additional stimulus for the US economy.
The Australian dollar rose after better-than-expected jobs data eased concerns about a persistent coronavirus outbreak in the country’s second-largest city.
The greenback was hampered by a decline in Treasury yields, but analysts say this is likely only a temporary setback because US lawmakers will eventually agree to more stimulus to help the economy recover from the coronavirus.
“The dollar needs positive news on stimulus to rise further, but I’m sure we’ll get there, because these politicians can’t go back to their constituencies empty handed,” said Masafumi Yamamoto, Chief Currency Strategist at Mizuho Securities in Tokyo.
“Once this happens, gains in dollar/yen could be a catalyst for dollar gains against other currencies.”
Against the euro, the dollar fell to $1.1804, adding to a 0.4% decline on Wednesday.
The British pound rose 0.15% to $1.3053.
The dollar edged lower against the safe harbour Swiss franc to 0.9118.
The dollar pulled back from a three-week high to trade at 106.78 yen.
The onshore yuan briefly rose to a five-month high before steadying at 6.9421 per dollar as nerves set it before US and Chinese officials meet Saturday to review their Phase I trade deal.
President Donald Trump accused congressional Democrats on Wednesday of not wanting to negotiate over a US coronavirus aid package as top Republican and Democratic negotiators traded blame for a five-day lapse in talks over relief legislation.
