The U.S. dollar hit a five-month low against the yen Tuesday morning as risk appetite grew among global investors.
The greenback was down about 0.5 percent for the session against a basket of international currencies. Market participants have started to edge money back into perceived riskier assets, like stocks, signaling that fears seen last week during the sell-off have dissipated, for now.
"The USD is in a structural, medium-term downtrend. Part of the reason for this is the U.S. fiscal account deficit, which is expanding rapidly," Stephen Gallo, European head of forex strategy at Bank of Montreal, told CNBC via email.
The dollar index has depreciated 3 percent since the start of 2018. This has been driven by comments from the U.S. administration that a weak dollar is good for international trade as well as improving economic indicators in other regions, like the euro zone, which has boosted the euro.