Dollar sinks on stimulus progress, pound boosted by Brexit hopes

The dollar hovered near 2 ½-year lows on Wednesday as progress on a big U.S. government spending bill and COVID-19 relief boosted risk appetite, reducing demand for safe assets.

The dollar traded at $1.21630 per euro, close to the 1 ½-year low of $1.2177 hit on Monday. It fell 0.2% to 103.44 against the yen on Wednesday.

The pound sat at $1.3463 after rising 0.9% in the previous session. It hit $1.3540 this month, its strongest level since mid-2018.

The pound held onto gains made on Tuesday after reports that a Brexit trade deal may be close. This is despite British Prime Minister Boris Johnson saying that the outcome of the talks is likely to be a no deal.

The United States also expanded its COVID-19 vaccine rollout from Pfizer Inc and BioNTech, supporting risk sentiment.

The dollar index stood at 90.447, after dropping to 90.419 on Monday, its lowest level since April 2018.

The Aussie stood at 75.595 U.S. cents and the kiwi at 71.05.