Early on Wednesday, the US dollar continues to exhibit signs of weakness, holding close to the lowest levels seen in two and a half year lows as a result of the improved risk appetite as traders focus on the rollout of the COVID-19 vaccines across multiple countries. At the time of writing, the US dollar index DXY is trading around 90.38.

The safe haven appeal of the US dollar has come under pressure recently, ever since multiple pharmaceutical companies reported progress in the development of vaccines that can effectively halt the spread of the pandemic. Britain became the first country in the world to grant emergency approval for the Pfizer vaccine, followed by Canada and the US, raising expectations for economic recovery soon.

The US dollar has also come under pressure over possible progress towards finalizing the coronavirus relief package. On Tuesday, leaders of the US Congress met once again as they worked towards approving a $1.4 trillion plan for fiscal stimulus, raising hopes that the next round of measures could be announced soon.

Later today, the US dollar can experience volatility as the FOMC meeting concludes. Markets are widely expecting the central bank to hold interest rates steady but are looking forward for new guidance, especially on the Fed’s bond purchase initiatives.