The dollar index, a gauge of its value versus six major peers, traded down 0.36 percent to 96.92.
The dollar lost 0.55 percent versus the offshore yuan, to quote at 6.9109. In onshore trade, the yuan traded at 6.9164.
The safe-haven yen traded marginally lower at 113.45 on Monday. It had hit an intra-day low of 113.85, reflecting the prevailing risk-on mood.
The euro gained 0.3 percent to $1.1350 amid heavy dollar selling.
However, some analysts warned many issues still have to be resolved for risk sentiment to stay positive in the medium term.
“A lot will depend on developments in the next 90 days, but given the U.S. and China are on different pages, we don’t think the optimism can last. We reiterate trade wars need to be framed in terms of who hurts the least and see the G20 meeting as a stronger win for the U.S.,” said Sue Trinh, head of Asia EM FX strategy at RBC Capital Markets, in a note.
“The developments over the weekend will give the Fed more confidence to raise rates in 2019,” said Michael McCarthy, chief market strategist at CMC markets.
• China’s factory activity grew slightly in November, a private survey showed, though new export orders extended their decline in a further blow to the sector already hurt by the Sino-U.S. trade frictions.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for November, released on Monday, ticked up to 50.2 from 50.1 in October. Economists polled by Reuters had forecast a reading of 50.0, the level that separates expansion from contraction.
Domestic orders have been losing momentum in recent quarters as the world’s second-largest economy slows. Overall, a sub-index measuring new orders did improve slightly to 50.9 in November from 50.4 in the previous month, after manufacturers cut prices.
• Several world leaders are keen to strike trade deals with Britain once the country is out of the European Union, Prime Minister Theresa May will say on Monday, pressing the case for her Brexit deal before a fateful Dec. 11 vote in parliament.
May is facing an uphill struggle to get lawmakers to back her deal to keep close economic ties with the bloc, which she agreed with the EU in November. The main opposition Labour Party says it will seek a vote of no confidence in the government if May loses the vote.
• French President Emmanuel Macron ordered his prime minister on Sunday to hold talks with political leaders and demonstrators, as he sought a way out of nationwide protests after rioters turned central Paris into a battle zone.
Riot police on Saturday were overwhelmed as protesters ran amok in Paris’s wealthiest neighborhoods, torching dozens of cars, looting boutiques and smashing up luxury private homes and cafes in the worst disturbances the capital has seen since 1968.
The “yellow vest” rebellion erupted out of nowhere on Nov. 17, with protesters blocking roads across France and impeding access to some shopping malls, fuel depots and airports. Violent groups from the far right and far left as well as youths from the suburbs infiltrated Saturday’s protests, the authorities said.
• China has agreed to “reduce and remove” tariffs below the 40 percent level that Beijing is currently charging on U.S.-made vehicles, U.S. President Donald Trump said, as a trade war truce between the two countries gathers pace, cheering markets.
• Asia’s economic prospects looked gloomy as factory activity and export orders weakened across the region in November, with analysts expecting no quick rebound amid simmering global trade frictions.
In a sign corporate sentiment was taking a hit from worries over protectionism, manufacturers’ activity slipped in November in countries as varied as Indonesia, Taiwan and South Korea, the IHS Markit Purchasing Managers’ Index showed on Monday.
While factory activity rose slightly in China, new export orders extended their decline in a further blow to a sector already hurt by Sino-U.S. trade frictions.
• Italy’s borrowing costs fell to their lowest level in around two months on Monday after two newspapers reported Italy is negotiating with the EU to reduce its 2019 target for the budget deficit to 2.0 percent of gross domestic product, or even below.
“Yes, these are the figures,” Italian Finance Minister Giovanni Tria answered to a question whether Italy is negotiating a deficit to GDP ratio reduction to 2.0 percent or 1.9 percent, from the present target of 2.4 percent, said La Repubblica daily.
Italy’s two-year bond yield fell 5 basis points in early Monday trade to 0.80 percent, its lowest level just over two months.
• Oil prices soared by more than 4 percent on Monday after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $53.41 per barrel at 0739 GMT, up $2.48 per barrel, or 4.9 percent from their last close.
International Brent crude oil futures LCOc1 were up $2.66 per barrel, or 4.5 percent, at $62.12 a barrel.
Reference: Reuters, CNBC
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