The U.S. dollar fell across the board on Monday as several countries laid out plans to ease restrictions on businesses that have been closed due to the novel coronavirus outbreak, boosting risk appetite and reducing demand for the safe-haven U.S. currency.
"Reopening plans have fed into positive market sentiment to start the week," said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York. "The dollar is under some pressure."
Italy, which has the world's second-highest rate of coronavirus deaths, is among the countries that have laid out plans to allow businesses to reopen.
In the United States, a number of states have eased restrictions on businesses, and more are ready to follow.
The dollar fell 0.19% against a basket of currencies to 100.05. The euro was last up 0.07% at $1.0828, after earlier rising to $1.0861.
The single currency was also supported after credit-rating agency Standard & Poor's on Friday reaffirmed Italy's BBB rating. Many had expected a downgrade.
The yen gained after the Bank of Japan expanded its stimulus to help companies hit by the coronavirus crisis, pledging to buy an unlimited amount of bonds to keep borrowing costs low as the government tries to spend its way out of the deepening economic pain.
The dollar fell 0.23% against the Japanese currency to 107.25 yen, after earlier dropping to 107.00 yen, which was the lowest since April 15.
Traders are next focused on a U.S. Federal Reserve meeting that will end on Wednesday and a European Central Bank (ECB) meeting on Thursday.
The Australian dollar rose after Queensland and Western Australia states said they would ease social distancing rules this week.
The Aussie gained 1.21% against the greenback to $0.6465. It earlier reached $0.6471, the highest since March 12.
Some analysts, however, say the improvement in risk appetite is premature since lockdown measures are still in place and it will take time for people to return to their behaviour before the outbreak of COVID-19, the respiratory illness caused by the new coronavirus.
"We are a bit concerned of the market rally we have seen in risk assets," said Athanasios Vamvakidis, global head of G10 FX strategy at Bank of America Merrill Lynch. "We're still risk-off, we still like the dollar."