The dollar headed for its worst back-to-back weekly drop this year as the lower U.S. yields were a drag on the U.S. dollar, even in the face of Thursday’s stronger-than-expected retail sales and employment data. Investors increasingly bought into the Fed’s insistence of continued monetary support.

The dollar were on defensive on Thursday, losing steam as U.S. bond yields pulled back from last month’s surge as the Fed decided to maintain it dovish stance. A weaker U.S. dollar also saw commodity currencies supported.

The dollar fell to multi-week lows against several currencies on Wednesday, after an uptick in a U.S. consumer price gauge did not spark wider fears about accelerating inflation and the Federal Reserve’s tapering, pushing down U.S. bond yields.

The dollar traded lower on Tuesday, pressured by lower Treasury yields as traders awaited highly anticipated U.S. inflation data later in the global day. The greenback has retreated along with U.S. yields this month on expectations of faster U.S. economic growth and higher inflation.

The dollar is taking something of a breather after scaling multi-month peaks at the end of last month. Treasury yields and inflation data will be in focus, especially for the readings for U.S. inflation and retail sales this week.

The dollar was headed for its worst week of the year on Friday as unexpectedly strong economic data in Europe, downbeat U.S. jobs figures and a determinedly accommodative Fed stance have prompted investors to unwind some bets on the greenback.

Dollar traded lower on Thursday, undercut by lower Treasury yields, following the minutes of the Mar 16-17 FOMC meeting that were negative as policymakers agreed the economy was far from their long-term goals and that the path ahead remained highly uncertain.

The dollar softened on Wednesday as U.S. bond yields declined. A weakened T-note yields sap dollar’s interest rate differentials and are negative for the dollar. Traders rolled back aggressive expectations that the Fed will tighten its policy earlier than pledged.

The greenback was weakening through the global risk-on channel as foreign exchange traders sold the dollar and put more money to work outside of the U.S. Though the uptrend in rates remained intact following ISM survey yesterday and Friday's blockbuster jobs report.

The dollar steady as investors looked ahead to the  next catalyst, including on the data on the U.S. services sector later in the week for affirmation of a solid economic rebound from the coronavirus shock. Trading today however is expected to subdue as most major market are closed.

The dollar steadied on Friday as the markets are looking ahead to Friday’s March unemployment report. Major currencies is likely to be muted with many financial markets including Australia, Singapore, Hong Kong, Britain, and the US are shut for Easter holidays

The dollar edged higher against the other currencies as investors bet U.S. fiscal stimulus and aggressive vaccinations will help the U.S. economy to lead and outpace a global pandemic recovery. Risk-sensitive & commodities currencies reflected the caution.