The US currency king dollar lost its teeth in the European session as markets braced for the release of US inflation data.
Markets now expect US inflation to rise 4.1% year-on-year in May, a sharp decline from the 4.9% reading recorded in April.
The figures recorded will determine the next expectation for the Federal Reserve's (Fed) monetary policy decision early Thursday morning this week.
While awaiting inflation data, investors continued to shed their holdings on the giant currency US dollar to continue trading lower at the start of the European session.
At the time of writing, the dollar index, which measures the greenback's strength against a basket of currencies, was trading weak at 103.26.
Additionally, the pound rebounded after getting a boost from upbeat UK jobs data in April.
It indirectly supports expectations for interest rate hikes by England's central bank BOE).
In addition, the euro gained strength to surge to a new three-week high following a weakening US dollar, coupled with better-than-expected German economic sentiment data from the ZEW survey.
Looking at the development of commodity currencies, the Aussie dollar continued to strengthen at a five-week high, while the New Zealand dollar was the strongest in three weeks against the greenback.
The Canadian dollar rose slightly, in line with a rebound in crude oil trading after falling to a 3-month low on Monday.
