The dollar rose against the on Monday, approaching a three-week high, as investors unwound a surge of safe-haven trades made on the back of an attempted military coup in Turkey.
Turkey purged its police on Monday after rounding up thousands of soldiers in the wake of the unsuccessful coup over the weekend, with the government saying it was in control of the country and economy.
That eased concerns about the prospect of another major round of turmoil to add to Europe's economic and political problems, drawing investors back into higher-risk currencies and out of the traditional security of the yen.
Turkey's currency, the lira, also reversed earlier selling and rose by as much as 3 percent against the dollar, moving from three-month lows touched after news of the coup attempt broke on Friday.
The lira was last up 1.74 percent against the dollar to 2.9674 lira.
"I think the big theme today is one of relief," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
Borthwick also pointed to improved market sentiment regarding the political situation in the United Kingdom since Theresa May became prime minister last week.
The British pound rose 0.50 percent against the dollar to $1.3259. Sterling rose nearly 2 percent last week for its best week versus the greenback since early March.
"As you're seeing these two fronts ... both showing signs of resilience and also positive signs that the worst may be over then you're going to see these relief trades going through the market," he said.
The relief rally and the reversal of pre-Brexit trades boosted both the dollar and pound against the yen.
The pound has gained 8 percent against the yen in the past 8 days, while the dollar is up nearly 5 percent from its lows.
On Monday, the dollar was up 1 percent against the yen, rising to 105.85 yen. It rose as high as 105.96 in Asian trading.
The yen also has been under pressure since reports that discussion had begun about the possibility of the Bank of Japan directly funding a rise in government spending known as "helicopter money."
The euro rose 0.31 percent against the dollar to $1.1068.
The dollar index, which tracks the dollar against six major world currencies, was little moved at 96.54.