The dollar index slipped to its latest weekly lows following confidence in stimulus packages that have prompted investors to switch to risky currencies.
However, the decline appeared to be somewhat limited at the start of the Asian session following the recent increase in 10-year US treasury yields and the decline in S&P 500 futures. The dollar index remained above 90.00 against most major currencies.
The euro strengthened against the US dollar even after European Central Bank (ECB) President Christine Lagarde warned of a new surge in Covid-19 infection and the prospect of further sanctions could affect the European Zone's economic outlook.
The ECB, which maintained interest rates unchanged at its first policy meeting for the year, also promised to provide more support to the economy if necessary.
Investors remain wary of data to be released this afternoon, which is expected to record a slowdown in economic activity growth in the European Zone and the UK following the re-implementation of sanctions.
Meanwhile, pound sterling trading continued to maintain its strengthening momentum by trading around the highest level for over 2 years.
On the other hand, the Aussie dollar and the kiwi showed a slight decline at the beginning of the Asian session, but remained trading higher against the USD.
Today's Asian session market was reflected in the release of New Zealand's annual inflation data, which reported unchanged at 1.4 per cent in the fourth quarter of 2020. Meanwhile, the consumer price index showed a 0.5 increase in December.
