Early on Wednesday, the US dollar’s decline against other major currencies remains ongoing, with its value falling to a multi-year low amid rising expectations among traders for more fiscal stimulus measures beyond the latest coronavirus relief package. At the time of writing, the US dollar index DXY is trading around 89.92.

Against the Euro, AUD and NZD, the dollar dropped to an over two year low while it fell to an over five year low against safe haven Swiss franc. The weakness in the US dollar during the recent sessions has been driven by developments towards finalizing the next round of fiscal stimulus measures, including bigger stimulus checks for Americans.

Increased stimulus measures to prop up an economy – in this case, the US economy, dents investor confidence and weakens the currency. The US dollar is expected to trade bearish in the near future as Joe Biden’s presidency increases the likelihood of more stimulus measures and financial aid being rolled out.

The outlook for the reserve currency can also be affected by how much longer the coronavirus pandemic rages on in the US – the worst affected country in the world. Although it has begun rolling out COVID-19 vaccines, the US continues to see a high number of fresh infections, which are hurting the economy further.