The dollar bounced on Tuesday after the COVID-19 vaccine trial reported encouraging data, lifting market appetite for risky currencies.
The euro surged against the dollar and the Swiss franc after Germany and France proposed for a 500 billion euro recovery fund for European regions hardest hit by the pandemic.
Commodity currencies and risky assets also rallied. This came after oil prices rebounded from losses and as U.S. drugmaker Moderna reported positive data from their initial vaccine trials.
The euro stood at 1.0911 against the dollar on Tuesday, while the British pound climbed to $1.2206.
The dollar traded at 107.44 on the yen.
Despite the positive market mood, the resurgence of coronavirus infections in certain parts of the world still worried investors.
In the onshore market, the Chinese yuan steadied at 7.1069 on the dollar. However, currency traders remain wary amid the rising conflict between China and the United States.
The Australian dollar stood at $0.6527, nearing a one-week high, while the New Zealand dollar traded at $0.6042.