The dollar fell versus a basket of its peers on Monday as rising expectations of a U.S.-Sino trade deal led investors to shift away from the safety of the greenback into riskier assets.
Both the U.S. and China reported progress in five days of negotiations in Beijing last week, although the White House said much work remains to be done to force changes in Chinese trade behaviour.

Negotiations will continue next week in Washington as investors hope for an end to the trade war between the world’s two largest economies.
“Trade is the big focus for the markets…with talks shifting from Beijing to Washington, we could get more news flow,” said Michael McCarthy, chief markets strategist at CMC Markets.
“I expect the euro to remain under pressure this week while dollar and yen could also fall if we see risk-aversion based on negative trade news flow.”

The Aussie gained 0.2 per cent to 0.7154 dollar, after firming 0.48 per cent on Friday on hopes of a U.S.-China trade breakthrough. The kiwi dollar gained around 0.3 per cent on the dollar to 0.6886 dollar.
In Asia, the yen was steady versus the greenback at 110.53.
The escalating trade dispute between the world’s largest economies have kept markets highly volatile since last year.
U.S. duties on 200 billion dollars worth of Chinese imports are set to rise from 10 per cent to 25 per cent.

This happens if no deal is reached by March 1 to address U.S. demands that China curb forced technology transfers and better enforce intellectual property rights.
The dollar index, a gauge of its value versus six major peers, was down by 0.16 per cent at 96.74.
The index has gained 1.2 per cent so far this month in spite of weaker-than-expected U.S. data as well as a more cautious Federal Reserve, which is widely expected to keep rates steady this year due to a slowdown in growth and muted inflation.

The dollar index has gained mainly because of the euro, which has around 58 per cent weightage in the index.
The single currency was up 0.2 per cent at 1.1317 dollar in early Asian trade, after two straight weeks of losses.
Notwithstanding Monday’s gains, traders are betting on a weaker euro in the coming months as they expect the European Central Bank to keep its monetary policy accommodative due to low growth in the common area, tepid inflation and political uncertainties.