Around 11:25 am, the dollar gave up 0.18% against the euro, to 1.1882 dollars to the euro, and 0.35% against the yen, to 123.37 yen to the dollar.
The dollar retreated against the euro and the yen on Wednesday, with the market banking on a particularly accommodating US Federal Reserve (Fed) to counter the effects on the economy of the Covid-19 pandemic.
At around 10:25 am GMT (11:25 am CET), the dollar was down 0.18% against the euro, at 1.1882 dollars to the euro, and 0.35% against the yen, at 123.37 yen to the dollar.
Fed Chairman Jerome Powell said Tuesday evening that the recent rise in the infection rate remains a risk to the economy, “especially in the short term.”
“The Fed will stay there and is ready to use all its tools,” he said.
While measures to aid the economy tend to weigh on the value of the dollar, the index which compares the greenback to other major currencies was down for the fifth consecutive session.
“Betting on a fall in the dollar has become too consensual, but the fall in US yields remains the main subject of the foreign exchange market”, summarized Kit Juckes, analyst at Societe Generale.
Up against the dollar, the euro was however down against the yen (-0.18% to 123.37 yen) and the British pound (-0.16% to 89.42 pence per euro) .
“On both sides of the Atlantic, political groups are blocking” government stimulus plans for the economy, leaving central banks with the role of supporting the economy, explains Antje Praefcke, analyst at Commerzbank.
Budapest and Warsaw opposed the European recovery plan on Monday. The subject should be invited to a videoconference summit on Thursday officially devoted to the Covid-19 crisis.
The European Central Bank (ECB) has signaled that it will take further steps to support the economy at its next meeting in December.