The U.S. dollar fell against its major counterparts in the Asian session on Wednesday, as the progress in vaccine rollouts and growing hopes of a U.S. stimulus underpinned risk sentiment.

Hopes that U.S. President Joe Biden’s $1.9 trillion covid relief package will be passed soon without Republican support kept the dollar under pressure.

Investors hope for a faster recovery in economic activity led by U.S. stimulus, vaccine rollouts and strong corporate earnings.

The U.S. consumer inflation data for January is due at 8:30 am ET. Economists expect a 0.2 percent rise in core CPI on month.

Federal Reserve Chairman Jerome Powell is scheduled to speak at a webinar hosted by the Economic Club of New York at 2:00 pm ET.

Market participants expect Powell to reaffirm accommodative monetary policy stance to boost the economy.

The greenback dropped to near a 3-year low of 1.3827 against the pound, from a high of 1.3803 seen at 8:35 pm ET. On the downside, 1.41 is likely seen as its next support level.

The greenback depreciated to 9-day lows of 1.2130 against the euro and 0.8911 against the franc, after rising to 1.2109 and 0.8931, respectively in early deals. The greenback may find support around 1.23 against the euro and 0.86 against the franc.

The greenback reversed from its previous highs of 1.2710 against the loonie and 0.7725 against the aussie, falling to 2-week lows of 1.2689 and 0.7749, respectively. The next possible support for the greenback is seen around 1.24 against the loonie and 0.80 against the aussie.

The greenback edged down to 104.50 against the yen, off its early high of 104.71. If the greenback continues its fall, 101.00 is possibly seen as its next support level.

The greenback remained lower at 0.7234 against the kiwi, following a high of 0.7222 hit at 8:15 pm ET. The greenback is seen finding support around the 0.74 mark.

Looking ahead, U.S. wholesale inventories for December and CPI and monthly budget statement for January are scheduled for release in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

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