The dollar has risen in four of the last five trading sessions as the prospect of more stimulus has weighed on U.S. government bonds, sending the benchmark Treasury yield above 1% for the first time since March.
Expectations are high, but many analysts believe the spending push has already been priced in.
"We feel the fiscal cat is out of the bag already: it would take a lot to surprise markets after the re-pricing seen last week," ING analysts said.
"The scope for the reflation trade to restart on the back of this announcement alone is limited."
Benjamin Melman, chief investment officer at Edmond de Rothschild AM, was also cautious. He said Biden might have to scale back his stimulus ambitions to get the plan through Congress.
"First, I am not sure a big fiscal stimulus is going to happen. Secondly, the market is quite aware of it", he said.
The currency's recovery is also threatened by a build-up of bearish dollar positions.
FX speculators have been net short the dollar since mid-March, as investors' appetite for riskier assets hurt demand for the greenback.
Because U.S. stimulus supports risk sentiment, that could further weigh on the dollar, which is considered a safe haven.
The global recovery-sensitive Australian and New Zealand dollars firmed to $0.7765 and $0.7204.
The euro eased 0.06% to $1.2144 despite positive news from the bloc's economic powerhouse.
Germany's economy shrank by 5% in 2020, less than expected and a smaller contraction than during the global financial crisis, as unprecedented government rescue and stimulus measures lessened the shock of the COVID-19 pandemic.
"One could say we got off lightly," LBBW analyst Uwe Burkert said.
Bitcoin held on to 10% gains made on Wednesday after a slide of nearly $12,000 from last week's record high of $42,000. It rose about 2% to $38,092 on Thursday, up from as low as $30,261.13 on Jan. 11.
Interest in the cryptocurrency surged as institutional investors began buying heavily, viewing it as both an inflation hedge and as exposed to gains if it becomes more widely adopted.
(Reporting by Kevin Buckland; editing by Ana Nicolaci da Costa, Simon Cameron-Moore, Larry King and Barbara Lewis) ((Kevin.Buckland@thomsonreuters.com;))