Dollar drops its lowest since late April 2018

The dollar stayed near a 2 1/2-year low on Wednesday as investors cautiously eyed developments in talks about further fiscal stimulus from the United States, while risk currencies held onto gains on improving risk appetite.

Against major currencies, the dollar index fell 0.7% to 91.318, having hit its lowest level since late April 2018 of 91.263 overnight.

The Euro and the Kiwi steadied after an overnight jump to their 2 1/2-year highs as the dollar broadly weakened.

U.S. Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi held stimulus talks for the first time since the election, while a bipartisan group of senators and House members proposed $908 billion worth of coronavirus relief measures.

Pelosi said in a statement after the talks that Mnuchin would review coronavirus relief proposals.

“The currency market is skeptical whether these proposals could be agreed in a swift manner, since hopes were shattered once already when a stimulus package didn’t come into fruition before the presidential election,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.