On Thursday, the US dollar traded near its two-week lows amid lower yield on the US Treasury bonds. Moreover, the FOMC meeting minutes did not unveil any new information.

According to the document, the US Fed still believes that it needs more time to see significant progress concerning inflation and employment. This slightly alleviated concerns about an early switch to a tighter monetary policy in the US.

At the same time, the FOMC members suppose that prospects of the US economy remain vague as the coronavirus pandemic, including its new strains, poses significant risks.

Analysts at Capital Economics said that the minutes from the Fed's March meeting revealed no significant differences between the Committee members. Besides, there were no hints that the regulator will stop its QE program in the short term. The protocol was as dovish as expected.

Although the greenback is still under pressure, it is hovering above 92.00 points.

According to strategists at Citigroup, it is difficult to determine the further movement of the US dollar. They suppose that the currency may drop.

At the moment, market participants are ready for moderate risks. Against this background, the greenback is likely to lose in value, although without significant changes. At the same time, lower yield on the US Treasury bonds will not contribute to the dollar's rise.

On Wednesday, the yield on the US 10-year bonds reached 1.653%, dropping for the third day in a row.

In the last two days, investors were selling off the US dollar because of an increase in the cost of debt instruments.

"The sharp rally in US treasuries and fall in yields in recent sessions has brought some profound relief to the lowest yielding currencies, from the euro to the most negative yielding of them all, the Swiss franc," specialists at Saxo Bank bank.

"Arguably, the correction in yields can deepen a bit – perhaps taking the US 10-year benchmark back toward the 1.50% level, and thus provide a further nominal further boost for the lowest yielders. But I have a hard time seeing why yields should drop beyond that level unless we are in some unforeseen new bout of risk aversion, so the market will likely soon have to move on to other themes," they added.

A rise in the US bonds points to the fact that market participants support the Fed's attitude towards such issues as inflation and economic growth in the country.

However, this does not mean that markets do not wait for a faster economic recovery.

Market participants may return to such expectations, if the US employment continues increasing during several consecutive months.

Experts at Westpac believe that rapid vaccination, restart of the economy, and various stimulus measures should lead to significant improvements in the United States over the next few months.

They still foresee the US dollar's appreciation to 94.50 points. However, they admit that the currency may need several weeks to make a next jump. Market participants have already priced in a bulk of positive information.

Strategists at The Goldman Sachs think that firm US growth and rising bond yields may keep the greenback supported over the short term.

They also suppose that the situation may change soon as all the concerns have already been reflected by the quotes. Moreover, the vaccination pace in Europe is expected to accelerate in the several next months.

However, hopes that in the near future, Europe will be able to spread its wings after the virus-induced crisis are fading away. In the US, one third of the population has received at least first doses. At the same time, in Europe, the vaccination progress is twice lower. Moreover, the vaccination program in Europe highly depends on thAstraZeneca vaccine

.

At the same time, Germany considers the extension of the national lockdown. In France, restrictive measures are still in force, whereas in Italy, people still stay home. The virus is spreading over Europe, thus halting the economic recovery. That is why the recent surge in the eurozone business sentiment seems premature.

The euro/dollar pair reached its 2-week high, climbing above 1.1910. However, it failed to consolidate at these levels and dropped.

The pair advanced by 200 pips from its recent lows. However, concerns over the eurozone economic revival may have a negative influence on the euro and lead to its reversal.

According to Commonwealth Bank of Australia, Europe is far behind the US in terms of vaccination paces. The number of new virus cases is again rising in Europe. They suppose that the euro/dollar pair may fall to 1.1700 in the near future.

Credit Suisse foresees a decline to 1.1500 in the second quarter of the year.

"The Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year." This is in line with the regulator's intention to suppress yields in the EU. Loose monetary conditions, which include a weaker euro, are contributing to rising inflation expectations in the eurozone. This will encourage the ECB to continue with its current plan, especially at a time when the economy remains fragile, at risk of lockdown, and lacking US-style fiscal momentum.

They believe that the euro/dollar pair may slide to 1.1500 in the second quarter. The recovery will take place only if vaccination pace in Europe accelerates significantly.