The prolonged weakness of the US dollar finally helped the euro to rise above the $1 parity price level for the first time in 5 weeks in the European session.
In addition to the weakening USD factor, the currency was also supported by the expectation that the European Central Bank (ECB) will increase interest rates by 75 basis points at Thursday's policy meeting.
Against most major currencies, the dollar index is dipping lower at around 110.15, at the time of writing.
This follows a decline in US consumer confidence data in October following rising concerns over inflation and the possibility of a recession next year.
However, the market remains cautious as expectations for the Federal Reserve to continue raising interest rates at next week's policy meeting, are still maintained.
Meanwhile, the pound also extended its strengthening to hit a 6-week high against the US dollar after the UK's new Prime Minister, Rishi Sunak, promised to help the country out of the economic crisis.
Markets also welcomed Rishi Sunak's decision to retain Jeremy Hunt as UK finance minister.
Looking at commodity currency movements, the Aussie dollar strengthened to a 3-week high following encouraging readings in Australian inflation data.
The increase was also followed by the New Zealand and Canadian dollars which are now looking forward to the Bank of Canada (BOC) policy meeting in the upcoming New York session.
The yen, on the other hand, is stronger, approaching the price level it touched at the beginning of the week following the second intervention by Japan.
