The US dollar is set to post a weekly loss after strengthening over the past couple of weeks as weak economic data releases heighten concerns that an economic recovery in the aftermath of the coronavirus pandemic could take longer than anticipated. At the time of writing, the US dollar index DXY is trading around 90.55.

The bearishness in the US dollar was driven after the release of a weaker than expected employment report last Friday. The disappointing report raised fears among traders that the US labor market as well as the economy are still under pressure owing to the coronavirus pandemic despite the numerous stimulus initiatives and the rollout of the COVID-19 vaccines.

So far this week, the dollar has lost around 0.6% of its value, falling further during the previous session following the release of the latest unemployment claims numbers. The latest weekly jobless claims data also came in weaker than forecast, adding to worries about the state of the US economy.

Meanwhile, traders also have mixed feelings about the next round of fiscal stimulus measures proposed by President Joe Biden. While more stimulus could bolster the economy towards a faster recovery, it could heighten global reflation that could send traders away from the safety of the US dollar and towards riskier instruments instead.