The dollar index, which measures the greenback against six major peers, fell 0.30 percent to 101.9780 in late trading.
Markets are eagerly awaiting key U.S. inflation prints later this week, with the core consumer price index (CPI) remaining persistently high to date.
Market analysts note that a potential increase to the benchmark Fed funds rate at the July policy meeting of the Federal Open Market Committee (FOMC) has already been baked into the prices.
Several U.S. central bank officials suggested on Monday that the Fed is close to ending the rate hiking cycle. "We still have a bit of work to do," Fed Vice Chair for Supervision Michael Barr said on Monday. "I'll just say for myself, I think we're close."
The yield of U.S. two-year Treasury notes dropped by more than 10 basis points to around 4.85 percent on Monday.
Separately, the U.S. wholesale inventories were flat in May as firms stuck to more relaxed restocking strategies amid an uncertain demand environment, according to data from the Commerce Department published Monday.
The French economy is set to grow 0.1 percent in the April-June period from the previous quarter, when it expanded 0.2 percent, the Bank of France said on Monday in its monthly business climate report.
In late New York trading, the euro rose to 1.0999 dollars from 1.0967 dollars in the previous session, and the British pound increased to 1.2856 dollars from 1.2838 U.S. dollars in the previous session.
The U.S. dollar bought 141.3010 Japanese yen, lower than 142.1470 Japanese yen of the previous session, falling to a three-week low. The U.S. dollar decreased to 0.8854 Swiss francs from 0.8887 Swiss francs, and it increased to 1.3279 Canadian dollars from 1.3272 Canadian dollars. The U.S. dollar fell to 10.7647 Swedish Krona from 10.8309 Swedish Krona.
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