The Dollar remained close to its recent highs on Monday as investors evaluated China's somewhat underwhelming stimulus announcements from the weekend.
Meanwhile, the Euro continued to decline ahead of a central bank meeting this week.
The single currency dropped 0.1% to $1.092850, marking its 11th decrease in 12 sessions, as investors anticipated a widely expected 25 basis point interest rate cut from the European Central Bank (ECB) during its meeting on 17th October, driven by data indicating a decline in eurozone activity.
“Given the lagged effects with which policy operates it is hard to argue for more 'wait and see', clearly policy is too restrictive,” said Lloyds Bank strategist Sam Hill in a note.
“The issue for (ECB) President Lagarde will be how to communicate the shift without unsettling the hawks still obsessing with the rear-view mirror.”
Currency movements were slow as Japanese markets were closed for Sports Day, and US Treasuries were also not expected to influence the market since bond markets were shut for Columbus Day, Reuters news agency reports.
Sterling remained stable near one-month lows at $1.30595.
The Dollar index, measuring the currency against six major peers, hovered slightly above 103, approaching last week's peak, which is its highest level since mid-August. This rise was driven by traders scaling back expectations for additional significant rate cuts by the Federal Reserve at its remaining policy meetings this year.
Currency movements in major markets were lacklustre last week, with the Yen and Euro both declining by approximately 0.3%, while Sterling fell by 0.4%. The Dollar index, on the other hand, rose by 0.4%.
Recent US data indicated slightly higher-than-expected consumer inflation, but also revealed an increase in weekly jobless claims. Despite this, expectations remain that the Federal Reserve will cut rates by 25 basis points in November and December.
Traders are now focusing on Thursday's retail sales and jobless claims data in the US, as well as the ECB's policy review.
Fed Governor Christopher Waller, who advocates for a larger rate cut due to concerns that the pace of price increases is falling short of the Fed's target, is scheduled to speak later on Monday.