The US dollar struggled to find support earlier in the week, seeing it trade off the six-month high it hit last week.
Trading in the US dollar is expected to continue to slow as investors are cautiously awaiting the release of US inflation data on Wednesday.
Meanwhile, Bank of Japan (BOJ) Governor Kazuo Ueda broke his silence over the weekend, hinting at an exit from his ultra-loose monetary policy.
As a result, the 10-year Japanese government bond (JGB) yield jumped to a 9-year high and the yen also traded stronger at the open on Monday.
Meanwhile, the euro recovered slightly to trade hovering around 1.0700 against the greenback as investors now look ahead to the European Central Bank's (ECB) policy meeting on Thursday.
The pound currency also recorded a recovery by trading at around 1.2500 against the US dollar. UK employment and gross domestic product (GDP) data will be the focus of investors this week.
Turning to commodity currency developments, the Aussie and New Zealand dollars each traded stronger, helping both recover from three-month lows against the US dollar,
The Canadian dollar also traded stronger, supported by strong Canadian jobs data in August and crude oil prices holding steady at their highest level since November 2022.
No major economic data will be published in the New York session today, but investors remain wary of unexpected movements in currency markets.
