The US dollar weakened against most G10 currencies, with the Swedish krona leading gains. The move followed an interim agreement between the United States and Iran to reopen the Strait of Hormuz, which boosted US Treasuries and equities while putting pressure on oil prices.

The Bloomberg Dollar Spot Index fell as much as 0.4% before paring some of the decline.

The yield on the 10-year US Treasury note dropped approximately 1.6 basis points to 4.46%. Brent crude futures declined around 4.6%, while the S&P 500 index advanced 1.8%.

According to two Europe-based traders, momentum traders are following the trend and increasing bets on a weaker dollar after hedge funds began establishing short dollar positions late last week.

The euro gained 0.2% against the dollar, trading at 1.1593.

European Central Bank President Christine Lagarde stated that high energy prices are beginning to spread to other areas of the economy.

The euro rose 0.1% against the British pound, reaching 0.8641.

The Australian dollar climbed 0.3% against the US dollar to 0.7074, marking its highest level since June 4.

The US dollar was little changed against the Japanese yen, quoted at 160.31.

The Canadian dollar was largely steady, with the US dollar trading at 1.3989 against the loonie.

Canadian Prime Minister Mark Carney indicated that the United States wishes to avoid triggering a congressional vote process during negotiations on the US-Mexico-Canada Agreement.