The U.S. dollar fell to a two-year low on Wednesday as pressure built on the Federal Reserve to strike a dovish policy stance amid a surge in coronavirus cases fuelling demand for riskier currencies like the Norwegian crown and the Australian dollar.

Axar.az reports citing foreign media.

Financial markets expect policymakers to hold fire on fresh steps, but rising infection rates are leading some analysts to predict strong forward guidance from the Fed on further policy actions.

“Even if the Fed doesn’t come out explicitly signalling more policy support, the dollar’s outlook remains weak thanks to the diverging trends in coronavirus cases between Europe and the U.S.,” said Ulrich Leuchtmann, head of foreign exchange and commodity research at Commerzbank.

Four U.S. states in the south and west reported one-day records for coronavirus deaths on Tuesday and nationwide cases stayed high.

Against a basket of other currencies =USD, the dollar fell 0.4% to 93.41, its lowest level since June 2018. It has weakened more than 3% since the last Fed meeting as yields on benchmark U.S. Treasury debt have fallen more than 20 bps since then.