The euro continued its rise on Thursday against a dollar weakened in particular by the political deadlock in the United States on a new aid plan for the Americans.

Around 09:00 GMT (11:00 in Paris), the euro gained 0.47% against the greenback, at 1.1839 dollar.

"The coronavirus continues to cast a shadow over the prospects for the recovery of the US economy and partisanship preventing a deal between Democrats and Republicans is not helping," said Ricardo Evangelista, an analyst at ActivTrades.

"Without a stimulus package, the U.S. economy is unlikely to recover quickly and this is the main reason for the recent weakness of the dollar," he said.

Negotiations on a new plan to help Americans stalled Wednesday, and the Trump administration accused Democrats of avoiding reaching a deal that could work in favor of the Republican president, less than three months before the presidential election.

Discussions are stalling on the total envelope: the Democrats want to go up to $ 3 trillion while the Republicans want to limit it to $ 1 trillion. The Democrats had proposed a compromise of 2,000 billion, refused by the White House.

On Wednesday, the dollar also saw its decline deepen "after U.S. inflation data showed that prices rose much more than expected in July," said Thu Lan Nguyen, an analyst at Commerzbank.

Consumer prices in the United States rose by 0.6% in July, as in June, while analysts were expecting +0.3%.

In theory, higher-than-expected inflation benefits the currency concerned because it increases the chances of higher policy interest rates.

But as Thu Lan Nguyen points out, in the current context, with the pandemic, monetary policy is no longer really correlated with inflation and is not expected to normalize for a while.

"However, if inflation rises, it means that real yields (i.e. by removing the rise in prices, editor's note) of US bonds will fall, which is anything but positive for the dollar," she said.

In general, the value of a currency is correlated with the evolution of bond yields, in the sense that they reflect the market's opinion on the short- and long-term economic outlook.