Dollar on defensive over upbeat mood, hopes for U.S. stimulus

The dollar was on the defensive at a one-week low on Thursday as upbeat U.S. data and fresh hopes for coronavirus stimulus aid lifted investors’ confidence to seek out risky assets.

U.S. Treasury Secretary Steven Mnuchin said that talks about the stimulus package with House Speaker Nancy Pelosi made progress. This news, along with strong U.S. labor and manufacturing data helped stocks rally.

The dollar index fell to a one-week low of  93.664. In Asian trade, the kiwi rose to a one-week high of $0.6623, while the Aussie climbed 0.1% to $07170.

Also adding to the positive sentiment was U.S. data showing that unemployment was higher than forecasted and that midwest manufacturing grew more than anticipated.

The yen stood at 105.45 in Asian trade. The firm position of the yen suggested that despite the positive mood, investors are still seeking out safe havens.

The Chinese yuan rose to a one-week high of 6.7804 in offshore trade. The euro climbed 0.2% on Wednesday and firmed at $1.1726 on Thursday. The pound steadied at $1.2921.