The dollar slid to one-month lows against a basket of the other major currencies on Monday as worries over trade tensions between the U.S. and China subsided and risk appetite recovered.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.26% to 88.87 by 09:02 AM ET (13:02 GMT), the lowest level since February 16.
The Wall Street Journal reported Monday that Beijing and Washington are negotiating behind the scenes to improve U.S. access to Chinese markets, after a week of threats over trade tariffs.
The report eased concerns over the prospect of a trade war between the two countries, which investors fear could hit growth in the U.S. and derail global growth.
The euro rose to two-and-half week highs against the dollar against the dollar, with EUR/USD up 0.4% to 1.2400.
The single currency was boosted after Jens Weidmann, Germany’s likely candidate to become the European Central Bank’s next president, said market expectations of a rate hike towards the middle of next year were “not completely unrealistic.”
The dollar moved higher against the safe haven yen, with USD/JPY up 0.4% to 105.61 after falling to a 16-month low of 104.62 overnight.
In Japan, a growing cronyism scandal that has seen Prime Minister Shinzo Abe’s popularity plunge remained in focus ahead of parliamentary testimony by a central figure in the controversy on Tuesday.
The scandal has raised concerns over Abe’s ability to continue pursuing his Abenomics policies, which include aggressive monetary easing.
Meanwhile, the pound was higher against the dollar, with GBP/USD climbing 0.47% to 1.4196.
The Australian and New Zealand dollar also gained ground, with AUD/USD up 0.27% to 0.7719 and NZD/USD adding on 0.61% to trade at 0.7277.