The dollar was under pressure on Wednesday from a towering euro and crumbling U.S. yields, as the latest coronavirus relief package got bogged down in Congress and investors braced for a bumpy ride to economic repair.

A hardening perception that the U.S. rebound is lagging Europe has buttressed the common currency just below a two-year high, helping it repel a bounce in the dollar this week.

The euro last sat at $1.1808, after twice testing support around $1.17, as focus turns to U.S. private jobs data due later in the day and the Washington stalemate.

The Japanese yen rose to 105.66 per dollar and gold soared above $2,000 an ounce as the bond market’s dim view of the U.S. recovery sent real yields further into negative territory and nominal yields close to record lows.

“Failure to agree a fiscal package has pushed back the U.S. dollar,” said Imre Speizer, FX analyst at Westpac in Auckland.

“So if they agree something in the next few days, see the dollar bouncing back,” he said. “But even if we get another leg to it, I think it is still dollar weakness for the rest of the year.”

White House negotiators on Tuesday vowed to work “around the clock” with congressional Democrats to try to reach a deal on coronavirus relief by the end of this week.

But lawmakers have allowed a $600-a-week unemployment benefit to lapse while they remain at loggerheads and the two sides still seem far apart. Treasury Secretary Steven Mnuchin warned that “we’re not going anywhere close” to the $3.4 trillion that Democrats have been seeking.

The Australian and New Zealand dollars edged ahead, to climb back towards multi-month highs hit last week. The kiwi also won support from an unexpected fall in unemployment and was last 0.3% stronger at $0.6639.

The Aussie rose 0.2% to $0.7172 and the pound, which has shrugged off the dollar’s bounce this week, was steady at $1.3080.

The dollar has been sliding since March, as central bank liquidity measures and calmer markets have eased demand for the world’s reserve currency.

But its prime antagonist in recent weeks has been the euro, which in July posted its best month in almost 10 years against the greenback, as a Europe-wide fiscal package convinced investors that the bloc can manage an economic rebound.

Net long bets on the euro hit a record high last week as low yields dulled the dollar’s allure and many in the market are convinced the common currency has further to run.

The yield on inflation-protected 10-year U.S. debt is at a record low of -1.05% and nominal 10-year yields sit near their lowest since the height of the March panic, at 0.5118%.

Investors are already expecting a slowdown in U.S. hiring from private payrolls data due around 1215 GMT. But a disappointment would bode ill for broader payroll data due on Friday and underscore the apparent divergence between Europe and the United States.

Analysts at ING have also noted that equity investors have yet to really buy in to the European recovery story – and say a pile-in could provide even more support to the currency.

“Buy-side surveys suggest that investors are still heavily overweight U.S. equities, especially tech stocks, and are minded to rotate into the Eurozone and see the euro as cheap,” said ING’s global head of markets Chris Turner.

“If that rotation comes to pass … then euro/dollar may be a $1.25 story after all.”