NEW YORK: The dollar fell to three-week lows on Friday as optimism that a deal for new US stimulus would be reached, and as investors bet that Democrat Joe Biden is more likely to win the US presidency and offer a larger economic package.

After stalling talks with Democrats on a comprehensive aid package earlier this week, US President Donald Trump on Thursday called for a "skinny" relief bill that would include elements such as direct payments and a bailout of the struggling airline sector.

The dollar index against a basket of major currencies fell 0.34% to 93.23, the lowest since September 21. It has held within a range from 91.74 to 94.75 since late July. The euro rose 0.45% to $1.1811. The greenback weakened 0.16% against the Japanese yen to 105.84 yen.

The offshore yuan strengthened to 6.6801, the strongest since April 2019. The pound was steady, brushing off worse than expected UK growth data as investors became more optimistic about a Brexit deal being reached ahead of a key European Council summit next week. Sterling was last up 0.29% at $1.2970.