The US dollar weakened on Wednesday against the euro and the British pound, sending the sterling above $1.30 for the first time since March, after the Federal Reserve strengthened stimulus measures to increase dollars liquidity on the back of the COVID-19 crises.
The dollar index, which measures the US currency against six main peers, continued its session losses to around 0.4%, slipped by more than 4% in July to hit a two-year low.
The Fed kept its benchmark interest rate within a range of 0-0.25% and pledged to keep interest rates near zero until it’s confident that the economy is on the right track to achieving maximum employment targets and price stability.
Also, the 10-year treasury yields are near historical lows, increasing the appeal of other currencies. The British pound advanced for the ninth consecutive day, up 0.6% to $1.3012, while the euro rose 0.8% to $1.1805.
The United States reported 1,121 deaths from coronavirus on Tuesday, bringing the average death toll to more than 1,000.
Meanwhile, Congress remains deadlocked over the terms of the new pandemic relief package. A $1 trillion proposal by Republicans in the Senate faced stiff resistance from Democrats, who are opposed to reducing enhanced unemployment benefits from $600 a week to only $200 a week.
The Standard & Poor’s 500 Index closed up 1.2%, with a lead led by Apple, Microsoft and Amazon ahead of the announcement of quarterly results for the technology company this week, and the Nasdaq Index rose 1.4%.
Bitcoin, the largest cryptocurrency, is at its highest level in 11 months at around $11,000 after rising earlier this week. It increased by 51% in 2020, almost twice the gains of gold, which sparked enthusiasm in traditional markets this week when it rose to a record high during the day.
Ether, the second largest cryptocurrency, has also climbed about 30% in the past week, which is a bigger gain than the S&P 500 indexed in 2019, and 142% in 2020.