The dollar was on the defensive at a one-week low on Thursday, as robust U.S. data and fresh hopes for U.S. fiscal stimulus had investors confident enough about economic recovery prospects to seek out riskier currencies.

Republican President Donald Trump’s administration has proposed a coronavirus stimulus package to House Democrats worth more than $1.5 trillion, and hopes are rising that both parties will reach a compromise.

Along with strong U.S. labour and manufacturing data, that helped stocks to rally, and the mood pulled the dollar to a one-week low of 93.664 against a basket of currencies.

At the same time, jobs figures that showed U.S. private employers stepped up hiring more than forecast last month and that Midwest manufacturing grew faster than expected also fed in to the positive sentiment.

Chinese data on Wednesday had also shown the recovery on track in the world’s second-biggest economy.

Gains in the euro were also muted after European Central Bank President Christine Lagarde hinted that a strategy overhaul, and a more accommodative approach to inflation, could be possible.

The euro edged up 0.22% on Wednesday and held at $1.17248on Thursday. The pound edged up to $1.2941.