Major currencies traded cautiously as US dollar trading began to show declines following renewed hopes that a fiscal stimulus package would be agreed before the presidential election.
President Donald Trump said he was ready for a bigger stimulus than proposed by House of Representatives Speaker Nancy Pelosi worth $ 2.2 trillion.
However, the market remains cautious as Trump needs to convince Senate Republicans who prefer small aid packages, to support his proposal.
In the European session, the dollar index traded down 0.1% against a basket of major currencies at 93.57.
The Asian currency, the Aussie dollar and the New Zealand dollar have garnered support from data showing a steady recovery in the Chinese economy, although readings recorded slightly stray from market expectations.
Meanwhile, the pound sterling showed higher gains at the opening of the European session following the Brexit trade deal negotiations expected to continue this week despite negative statements from UK Prime Minister Boris Johnson.
Last Friday, PM Johnson said it was pointless to continue negotiations and it was time to prepare to leave the EU without an agreement by the December 31 deadline.
In addition, euro trading is back on track despite rising concerns over a double economic downturn due to the second wave of Covid-19.
