The dollar suffered losses last week and was headed toward its first monthly decline in five months on Monday as investors have eased their bets that rising US rates will result in additional gains.
Concerns about a global recession have begun to wane a little as well.
Trade was expected to be lessened through Monday as US stock and bond markets close for Memorial Day.
The dollar was slightly weaker on the euro in the Asia session at $1.0728, which is just above a five-week low. It took a dip last week of about 1.5% on the common currency.
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The Australian and New Zealand dollars stayed firm while the yen was slightly weaker at 127.28 per dollar.
The Aussie stayed near a three-week high at $0.7161. The kiwi did the same at $0.6536.
“The dollar can fall further this week. Were it not for China’s lockdown, the global outlook would be brighter, and the dollar lower,” Joe Capurso, head of international economics at the Commonwealth Bank of Australia in Sydney, said.
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The dollar index reached a 20-year high of 105,010 earlier this month and stayed at 101,660 on Monday.
China’s yuan held at 6.7210 per dollar in offshore trade after the country eased coronavirus restrictions.
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Investors have also taken advantage of suggestions that the Federal Reserve may rest soon.
“The Fed has stopped short of validating calls for even more tightening, leading to a plateau in forward expectations,” NatWest Markets global head of desk strategy John Briggs said.
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Reuters contributed to this report.