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The greenback climbed to a more than three-month peak against a basket of major currencies, but has come off its highs as the yen and Swiss franc advanced with the decline in risk appetite.

The U.S. dollar though remained sharply higher against risk-sensitive currencies such as the Australian, Canadian and New Zealand dollars.

The yen climbed to its highest in 1-1/2 months versus the dollar.

The Delta variant of COVID-19 is now the dominant strain worldwide, accompanied by a surge of deaths around the United States almost entirely among unvaccinated people, U.S. officials said on Friday.

In afternoon trading, the dollar index, which measures the greenback's value against six major currencies, rose to its highest since April 5. It was last up 0.2% on the day at 92.855.

As a result of global uncertainty related to the coronavirus variant, U.S. rates markets have also reduced their expectations on Federal Reserve tightening in 2022 and 2023.

Fed funds futures, which track short-term rate expectations, showed the chances of a quarter-point hike by the Fed in December 2022 dropped to 58% on Monday from 90% on July 13, when the consumer price index was released. The likelihood that the Fed raises rates in January 2023 fell to 70% from 100% last Tuesday.

The yen surged on Monday, rising to its highest since late May, which pushed the greenback lower and was last down 0.6% at 109.44 yen.

The pound was down 0.7% at $1.3671.

The euro was down 0.1% at $1.1797, after dropping to a three-month low of $1.1764, ahead of this week's European Central Bank meeting.

In cryptocurrencies, bitcoin was testing key support of $30,000 and was last down 3.4% at $30,710.

Reference: Reuters, CNBC