Dollar briefly up as investors focus on Fed, coronavirus stimulus

The dollar was briefly lifted on Thursday after the U.S. Federal Reserve offered no concrete clues about its next course of action, while investors hoped for an easy policy as the coronavirus resurgence stalled economic recovery.

The dollar index bounced 0.4% from a two-year low, while the Aussie fell 8%, breaking its 15-month peak on Wednesday.

The yen slid 0.3% to 105.24 on the dollar but gained on other majors as the market stayed cautious and focused on the U.S. and European data, as well as the U.S. coronavirus fiscal package.

The euro fell 0.3% to $1.1745 but has gained nearly 47% on the dollar in July. 

Meanwhile, the escalating U.S.-China tensions dragged on risk sentiment, putting pressure on commodity currencies. The Aussie lost 0.8% to $0.7132 and the kiwi slid 0.7% to $0.6623.

The yuan also slid to 7.0055 on the dollar. The Chinese currency has slumped despite the dollar’s weakness due to the countries’ diplomatic issues including territorial claims in the South China Sea and Beijing’s security law in Hong Kong.