The Australian dollar rose after better-than-expected jobs data eased concerns about a persistent coronavirus outbreak in the country's second-largest city.
The greenback was hampered by a decline in Treasury yields, but analysts say this is likely only a temporary setback because U.S. lawmakers will eventually agree to more stimulus to help the economy recover from the coronavirus.
"The dollar needs positive news on stimulus to rise further, but I'm sure we'll get there, because these politicians can't go back to their constituencies empty handed," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.
"Once this happens, gains in dollar/yen could be a catalyst for dollar gains against other currencies."
Against the euro
The British pound
The dollar fell 0.2% against the safe harbour Swiss franc
The dollar pulled back from a three-week high to trade at 106.65 yen
The onshore yuan
President Donald Trump accused congressional Democrats on Wednesday of not wanting to negotiate over a U.S. coronavirus aid package as top Republican and Democratic negotiators traded blame for a five-day lapse in talks over relief legislation.
The pandemic has taken a particularly heavy toll on the United States, where it has killed more people than any other country. Millions of U.S. workers have lost jobs, and supplemental federal unemployment benefits expired last month.
Market sentiment has swung between optimism and pessimism, but analysts argue that more stimulus is the most likely outcome because without it the U.S. economic recovery could stall.
The U.S. dollar index against a basket of major currencies fell 0.2% on Thursday in Asia but was still well above the two-year low it reached last week.
Elsewhere in currencies, the Australian dollar
The positive jobs data suggests the economy remains resilient in the face of an ongoing outbreak of coronavirus cases in Melbourne.
Across the Tasman Sea, the New Zealand dollar
(Reporting by Stanley White; Editing by Sam Holmes and Lincoln Feast.)
By Stanley White