NEW YORK: The dollar fell on Wednesday, tempering its safe-haven appeal for now, as US stocks rallied, although sentiment remained cautious amid a resurgence of new coronavirus cases globally, particularly in the United States.
Demand for the US currency proved remarkably stable as oil prices steadied while European bourses traded in negative territory.
"The buck tends to struggle when Wall Street rallies," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The dollar is typically seen as a safe haven for investors to park their cash each time a resurgence of the pandemic seems to threaten a global economic recovery.
Against a basket of its rivals, the dollar index dropped 0.5% to 96.527.
The euro rose 0.6% versus the dollar to $1.1337 marginally, while a recent fall in selling positions against the greenback provided room for possible further drops.
Commodity currencies, which tend to thrive in times of increased risk appetite, also gained against the dollar.
The Australian dollar rose 0.4% against the greenback to US$0.6971. The New Zealand dollar grew 0.2% to US$0.6566, with the Canadian dollar rising 0.5% to C$1.3543 per US dollar.
Against the safe-haven yen, the dollar was slightly down on the day at 107.44 yen. The greenback was also 0.5% lower versus the Swiss franc at 0.9382.
Sterling shrugged off earlier losses and rose 0.4% to $1.2588, after British finance minister Rishi Sunak promised 30 billion pounds ($37.7 billion) to head off an unemployment crisis by paying companies to bring back furloughed workers and cutting taxes for hospitality firms and homebuyers.
Earlier, the onshore yuan was stable at 7.0129, halting a two-day rally, after the Chinese central bank's daily midpoint for the currency was set at a weaker than expected level.
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