Following the dismal moves of the previous session, most major currencies started to move more aggressively as the market entered the European session.
The US dollar fell lower even though last weekend, some Federal Reserve (Fed) policymakers insisted on continuing to extend policy tightening.
Fed Governor Christopher Waller expressed his support for another significant hike at next week's FOMC meeting, but the US dollar failed to gain strength.
However, the FedWatch tool indicates that the market now sees a 90% probability of an increase of 75 basis points.
The main focus of the market is now aimed at the publication of the United States inflation data on Tuesday which is expected to continue to record a decline in August.
The euro rose to a three-week high against the greenback, on support from European Central Bank (ECB) policymakers who revived hopes for another 75 basis point hike in October.
In addition, there are also reports that say the ECB sees a growing risk of raising interest rates to 2% or higher.
In addition, the pound also traded higher despite the latest data reading showing the UK economy growing more slowly than expected in July.
Meanwhile, the yen failed to show more significant movement even after Japan's Deputy Chief Cabinet Secretary, Seiji Kihara urged the government to take the necessary measures to overcome the extreme depreciation of the yen.
