There was a rally for the Euro on Monday as investors sold the Dollar on hopes global growth will be boosted by easing lockdowns in China.

The Dollar also received pressure from calm in equity markets in European Monday morning trading, following steep falls last week. However, investors have turned to the Dollar this year as risk assets fell and fears of the economy were heightened.

Overall, risk-sensitive currencies edged up. Following the Labour Party’s win in national elections over the weekend, the Australian Dollar rose almost 1%, Reuters reports.

The British Pound rose 0.5% and Norway’s Krone also made gains as the Dollar sell-off that kicked-off last week continued into the new week.

"We see this as just a temporary correction (in the U.S. Dollar) for now. If we look at the main reasons why the Dollar has been strengthening so much in recent months, we don't think that fundamental story has changed significantly over the past week," stated MUFG analyst Lee Hardman.

"But in the very short term there is a risk that this correction lower could extend further," he added.

In addition, the Euro moved up 0.3% to $1.0602, following a 1.5% rise last week, moving away from multi-year lows of $1.0349 earlier in May. There was also a rise for the Japanese Yen, up to 127.66 Yen per Dollar.

The U.S. Dollar index – measuring the currency against six major rivals – was up around 16% to a 20-year high over the 12 months to mid-May, yet fell 0.3% to 102.6.

Although the greenback has soared in 2022, forecasts of aggressive Fed rate hikes may mean further gains could be difficult from here on in, say analysts.

"The Dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China," said Commonwealth Bank of Australia strategist Joe Capurso.

"Given the type of policy support, we expect investment to rebound faster than consumer spending," he added.