The US dollar looks all set to post the largest weekly decline in over a decade over escalating fears about an impending recession in the global economy even as the US gets closer to rolling out its massive fiscal stimulus package. At the time of writing, the US dollar index DXY is trading around 98.91.

The US dollar lost around 1.44% of its value in the previous session following the release of the latest weekly jobless claims data. According to the report, the number of Americans claiming unemployment benefits touched a record high of 3.28 million during the previous week, rising from the previous figure of 3 million.

Against other major currencies, the US dollar index fell by 1.5% as the data pointed to signs of an upcoming recession in the US economy due to the coronavirus pandemic, which continues to affect and kill more people in the country as well as around the world. For the week, so far, DXY has seen a 2.9% decline.

As we near the end of the month, choppy trading sessions are likely to keep the dollar under pressure as traders look to adjust their hedges in currencies. The dollar has also weakened after expectations of upcoming fiscal stimulus by the US government restored traders’ faith in equity markets again to some extent, driving a move towards riskier assets and away from the USD.