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The USD index sank to four-month lows amid growing concerns about the outlook for the US economy, which is one of the worst situations brought by the coronavirus pandemic.
According to Johns Hopkins University, 3.8 million cases of COVID-19 infection have been identified in the United States.
Meanwhile, the greenback risks losing its attractiveness as July closes in the absence of a clear plan for permanent support for the US economy.
The White House is going to cut the payroll tax, but many experts do not see this step as the best way to protect the economy. Local companies are not hiring workers for a variety of reasons, and the payroll tax cut, analysts say, may prove useless in stimulating employment growth and consumer spending in the country.
Earlier, the leader of the Republicans in the US House of Representatives, Mitch McConnell, expressed doubts that the next package of support for the national economy in the amount of $ 1 trillion would be adopted this week.
The EUR / USD pair has reached the highest levels since October 2018 around 1.1580.
The key growth driver for the main currency pair was the results of the EU leaders' summit, which went on from Friday last week until this Tuesday but ended with the creation of an anti-crisis fund in the amount of € 750 billion.
According to experts, this deal will be of great importance to stimulate the growth of the region's economy, which is now in the process of being restarted. Unlike the United States, Europe has managed to avoid the second wave of COVID-19 as economic activity resumes. The latest statistics show that the European economy is improving, and the stimulus package will provide additional support.
Throughout the past month, the EUR / USD pair has been growing steadily, and now that it has broken through the 1.15 mark, it will have to overcome the minor resistance at 1.16 and the more powerful 1.17.
The safe dollar is expected to lose points in response to reports of progress on the COVID-19 vaccine, while the euro will be supported by the EU economic recovery fund and cautious optimism about the virus.
The GBP / USD pair climbed above the 1.27 level for the first time in six weeks, but failed to hold above this level and retreated to local lows near 1.2640.
The pound sterling came under pressure amid growing concerns over no-deal Brexit.
The United Kingdom and the EU will likely fail to strike a trade deal, The Daily Telegraph reported, citing knowledgeable sources.
Recall that the deadline for determining the general provisions of the agreement expires at the end of July.
At the same time, concerns that the rise in the incidence of coronavirus in the United States will delay the recovery of the national economy may deter USD bulls from going long. Another factor that may put pressure on the greenback may be the deadlock around the new stimulus measures in the US. These factors are expected to limit the fall in GBP / USD.
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