Dollar under pressure as doubts on U.S. economic recovery hover

The dollar stayed under pressure after falling to a 27-month low the previous session as doubts about U.S. economic recovery and the coronavirus fiscal aid weighed on the currency.

The dollar hit new lows against its peers overnight as the Fed’s stimulus programmes weighed on it and lifted U.S. stock indexes to record peaks.

The dollar index sat at 92.179. The euro traded at $1.1949, while the pound rose to $1.3255, surpassing Tuesday’s eight-month high of $1.3241.

Despite the dollar’s role as a safe-haven investment during crises, it has dropped since the Federal Reserve’s intervention into financial markets to maintain liquidity amid the pandemic.

The Fed’s programmes have lifted risk assets to all-time highs and shrank demand for safe havens. 

Meanwhile, Japan’s official exports data showed a 19.2% fall year-on-year in July, while core machinery orders dropped 7.6% month-on-month in June.

The dollar sat at 105.17 against the Japanese yen. The risk-sensitive Aussie traded close to $0.7255, while the kiwi bought $0.6611.