The dollar plunged on Tuesday as investors hoped for a faster global economic recovery despite the growing U.S.-China tensions and mass protests in several U.S. cities.
The dollar index fell to 97.790, its weakest level since March.
The euro steadied at $1.1154, nearing more than a 2-month high.
The British pound stood at $1.2491, after hitting a one-month high of $1.2506.
U.S. manufacturing activity broke from an 11-year low in May. Despite the low numbers, it showed that the economy was slowly recovering.
President Donald Trump said that he will deploy thousands of armed soldiers and police to stop the riots in the U.S. capital. He also vowed to employ similar tactics in other cities if the mayors and governors failed to control the protests.
Bloomberg reported on Monday that Beijing ordered state-owned firms to stop purchases of soybeans and pork from the United States. The news worried investors as it could further the tensions between the two countries.
The dollar traded in a range against the yen. It last stood at 107.57.
The Australian dollar firmed at $0.6794. The Chinese yuan sat at 7.1230 on the dollar in offshore trade.