The dollar fell versus a basket of its peers on Monday as rising expectations of a U.S.-Sino trade deal led investors to shift away from the safety of the greenback into riskier assets.
Both the United States and China reported progress in five days of negotiations in Beijing last week, although the White House said much work remains to be done to force changes in Chinese trade behaviour.
Negotiations will continue next week in Washington as investors hope for an end to the trade war between the world’s two largest economies.
“Trade is the big focus for the markets…with talks shifting from Beijing to Washington, we could get more news flow,” said Michael McCarthy, chief markets strategist at CMC Markets.
“I expect the euro to remain under pressure this week while dollar/yen could also fall if we see risk-aversion based on negative trade news flow.”
The Aussie gained 0.2 percent to $0.7154, after firming 0.48 percent on hopes of a U.S.-China trade breakthrough. The kiwi dollar gained around 0.3 percent on the dollar to $0.6886.