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2020.04.2221:07:00UTC+00Dollar Recovers After Initial Weakness

The U.S. dollar recovered after early weakness on Wednesday, as crude oil prices recovered from recent big losses on short-covering and a much smaller than expected increase in gasoline inventories last week.

Traders also digested the news about the U.S. Senate passing a new bill to provide funding for hospitals and small businesses and expand coronavirus testing.

The $484 billion aid package was approved unanimously by the Senate and now heads to the House, which could approve the bill as soon as Thursday.

President Donald Trump has said he will sign the bill and then plans to begin discussions on additional legislation to provide fiscal relief for states and local governments, increase infrastructure spending, provide tax incentives for restaurants and entertainment businesses and cut payroll taxes.

The dollar index rose to a fresh six-week high of 100.50, rising from an early low of 99.90.

Against the Euro, the dollar firmed up to $1.0824, from $1.0860.

The Pound Sterling weakened to $1.2322, giving up nearly 0.25% from Tuesday's close. UK inflation slowed to a three-month low in March, data from the Office for National Statistics showed. Consumer price inflation eased to 1.5% in March from 1.7 percent in February. This was the lowest rate since last December, when prices were up 1.3%. The rate came in line with expectations.

On a monthly basis, consumer prices remained flat after climbing 0.4% in February.

The Japanese Yen was little changed at 107.72 a dollar.

The Aussie was notably higher against the dollar at 0.6319. Against Swiss franc, the dollar was gaining at CHF 0.9719, up from CHF 0.9698.

The loonie was stronger at C$1.4171 a dollar, as against C$1.4211 on Tuesday. Data from Statistics Canada said the annual inflation rate in Canada dropped to 0.9% in March 2020 from 2.2% in the previous month and market expectations of 1.2%.. It was the lowest inflation rate since May 2015. Month-on-month, the consumer price index decreased 0.6% in March of 2020 over the previous month.

Core consumer prices in Canada rose 1.7% in March of 2020 over the same month in the previous year.

Another data from Statistics Canada said new housing prices in Canada went up 0.3% month-over-month in March, after a 0.4% increase in February.

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