The greenback traded lower as markets looked more cautious ahead of this week's FOMC policy meeting.
This follows a rise in the US stock market, where investors welcomed news of the central bank's efforts to ease the banking crisis and the Credit Suisse issue.
Investors are now more cautious towards the Federal Reserve (Fed) policy decision which is expected to increase interest rates by 25 basis points.
Against a basket of major currencies, the dollar index traded bleakly at around 103.32 during the Asian session.
Meanwhile, the pound was the best performing currency at the start of the week, with prices rising to their highest level since late January at around 1.2270 against the US dollar.
Like the Fed, investors expect the Bank of England (BOE) to raise rates by 25 basis points at its upcoming policy meeting on Thursday.
In addition, the euro recorded a moderate increase after the President of the European Central Bank (ECB) Christine Lagarde repeated her statement in front of the European Parliament that inflation is projected to remain high for a longer period.
In addition, although the news about Credit Suisse helped somewhat to ease the worries of investors in the US, but Credit Suisse's shares still fell lower.
This was followed by the Swiss franc trading underweight against most major currencies.
On the other hand, the Aussie and New Zealand dollars eased slightly in the Asian session, after the minutes of the Reserve Bank of Australia (RBA) meeting hinted at halting rate hikes in April.
The yen remained strong after rising to a new 6-week high against the greenback.
