Investing.com – The dollar was broadly lower on Monday, with the euro and the pound gaining ground as concerns over Italy’s budget row eased, but investors remained cautious as a host of geopolitical risks continued to loom over markets.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.27% to 96.56 by 04:32 AM ET (09:32 AM GMT), retreating from one-week highs of 96.96 reached overnight.
The dollar was supported overnight as fears of a slowdown in global economic growth and concerns over U.S.-China trade tensions sapped risk appetite.
The euro strengthened against the dollar, with EUR/USD rising 0.41% to 1.1382.
The euro was boosted by signs of a breakthrough in the long running row between Rome and the EU over Italy’s 2019 budget after Deputy Prime Minister Matteo Salvini indicated that his government could lower its borrowing targets.
The EU has rejected Italy’s 2019 draft budget, over plans to run a 2.4% deficit, which is in breach of EU fiscal rules.
On Sunday, EU leaders approved the terms of the UK’s withdrawal from the bloc, but market watchers are now focused on whether the Brexit deal will pass a vote in the British parliament.
Sterling was slightly lower against the euro, with EUR/GBP rising 0.18% to 0.8862.
The dollar was higher against the yen, with USD/JPY advancing 0.25% to 113.24.