Dollar remains weak amid slow U.S. economic recovery

The dollar stayed weak on Wednesday as the U.S. coronavirus stimulus package stalled in Congress and U.S. bond yields dropped, while investors awaited possible monetary easing to support the economy.

The Democrats in Congress and White House negotiators are still trying to reach a deal on the coronavirus package, but Treasury Secretary Mnuchin said that both parties have made progress on major components of the bill.

Investors’ perception that the slow U.S. economic recovery is lagging Europe has supported the euro as it broke above $1.19 in the last few days. On Wednesday, it stood at $1.1815.

The dollar index traded at 93.05 as it neared last week’s two-year low of 92.53. 10-year U.S. Treasury yields also neared a five-month low.

Traders are awaiting the release of Europe’s Purchasing Managers’ Index data due later in the day, along with the final U.S. PMI data.

Meanwhile, growth in the Chinese services sector showed a slowdown in July as new export business fell and unemployment surged.