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US Dollar under pressure on recovery worries

The dollar was under pressure on Wednesday from a towering euro and crumbling US yields, as the latest coronavirus relief package got bogged down in Congress and investors braced for a bumpy ride to economic repair.
A hardening perception that the US rebound is lagging Europe has buttressed the common currency just below a two-year high, helping it repel a bounce in the dollar this week.
The euro last sat at $1.1808, after twice testing support around $1.17, as focus turns to US private jobs data due later in the day and the Washington stalemate. The Japanese yen rose to 105.66 per dollar as the bond market’s dim view of the US recovery sent real yields further into negative territory and nominal yields close to record lows.
“Failure to agree a fiscal package has pushed back the US dollar,” said Imre Speizer, FX analyst at Westpac in Auckland. “So if they agree something in the next few days, see the dollar bouncing back,” he said. “But even if we get another leg to it, I think it is still dollar weakness for the rest of the year.”
White House negotiators on Tuesday vowed to work “around the clock” with congressional Democrats to try to reach a deal on coronavirus relief by the end of this week.
But lawmakers have allowed a $600-a-week unemployment benefit to lapse while they remain at loggerheads and the two sides still seem far apart. Treasury Secretary Steven Mnuchin warned that “we’re not going anywhere close” to the $3.4 trillion that Democrats have been seeking.
The Australian and New Zealand dollars edged ahead, to climb back towards multi-month highs hit last week. The kiwi also won support from an unexpected fall in unemployment and was last 0.3 per cent stronger at $0.6639.
The dollar has been sliding since March, as central bank liquidity measures and calmer markets have eased demand for the world’s reserve