The US dollar continues to strengthen, lifting off from the lowest levels seen in almost three years, supported by a rise in US Treasury yields and President elect Joe Biden offering more information on his plans for additional stimulus measures for the economy. At the time of writing, the US dollar index DXY is trading around 90.36.

The dollar has gained from investors unwinding their bearish bets on the reserve currency, buoyed by US Treasury yields rising above the 1% level for the first time since March 2020 when the pandemic spread across the US and most parts of the world. The greenback has traded bullish for four of the past five sessions, supported by the possibility of more fiscal stimulus.

Later today, Biden is expected to describe his plans for unleashing trillions of dollars worth of financial aid to offset the economic damage caused by the raging pandemic. Expectations for more stimulus efforts to prop up the economy have caused an uptick in Treasury yields and have also strengthened the currency as a result.

However, analysts have expressed caution that the recent bullishness in the US dollar could be momentary as more stimulus measures would weaken the currency in the near future. The likelihood of more stimulus is expected to improve the market sentiment, which in turn, could cause traders to move away from the safety of the greenback and towards riskier instruments instead.