The U.S. dollar fell across the board on Tuesday as optimism about a potential coronavirus vaccine and a reopening world economy helped investors shrug off Chinese-U.S. tensions, sapping demand for safe-haven assets.
The U.S. Dollar Currency Index, which measures the greenback's strength against six other major currencies, was 0.77% lower at 98.968, after slipping as low as 98.949, its weakest since May 1.
Investors' increased appetite for risky assets sent stock markets across the globe higher, and commodity markets rallied.
The S&P 500 index rose above the 3,000 level for the first time since March 5, as U.S. biotech corporation Novavax Inc became the latest company to join the race to test coronavirus vaccine candidates on humans and enrolled its first participants.
"Major currency movement is as one would expect on a day of strong equity gains; the USD is broadly lower," said Shaun Osborne, chief foreign exchange strategist at Scotia Bank.
Chinese-U.S. tensions have been simmering in the background as the United States repeatedly criticized Beijing's handling of the coronavirus outbreak, but investors have largely shrugged them off.
Data on Tuesday showed U.S. consumer confidence nudged up in May, suggesting the worst of the novel coronavirus-driven economic slump was potentially in the past as the country starts to reopen.
The dollar has remained in a narrow range since the end of March.
On Tuesday, the euro was 0.87% higher against the greenback after the Ifo institute said German exporters recovered somewhat in May after a "catastrophic" April.
The trade-sensitive Australian and New Zealand dollars and Norwegian crown each rose more than 1% versus the U.S. dollar.
The dollar was about flat on the day against the Japanese yen a day after Japan ended its state of emergency
The weaker greenback helped the British pound rise 1.43% to $1.2356.