The dollar index stood near 2-1/2-month lows as investors grew increasingly convinced that the Federal Reserve will not raise interest rates this year amid uncertainties over the USA economy.
Financial markets have been rattled by heightened worries about slowing global growth, especially in the United States and China, though data on Friday showed strong U.S. job growth.
The U.S. dollar index, which measures the greenback's strength against a basket of six major currencies, was down 0.43% to 95.33, the weakest level since October 22.
The boost to stock markets saw them recapture all the year's losses and push into positive territory for 2019, with Wall St's main indices closing up more than 3 percent by the close on Friday. Spot gold was little changed at $1,287.70 by 0148 GMT.More news: Afghan Taliban, US to hold fourth round of peace talks in Qatar
The Dow Jones Industrial Average .DJI rose 74.9 points, or 0.32 percent, to 23,508.06, the S&P 500 .SPX gained 14.26 points, or 0.56 percent, to 2,546.2 and the Nasdaq Composite .IXIC added 58.25 points, or 0.86 percent, to 6,797.11. Silver edged 0.1 per cent lower to $15.63 per ounce, while platinum rose 0.2 per cent to $823.50, having touched highest in more than a month at $831.10 on Monday.
U.S. Treasury prices erased early gains after a private report released on Monday showed growth of U.S. services industries slowed to a five-month low in December, signaling the world's largest economy is decelerating faster than economists' forecasts.
That is almost 50 bps below the November peak, however, suggesting there is still plenty of nervousness around growth prospects for the USA economy. "That's a big shift given until relatively recently when we've been focusing on rate hikes".
The U.S. dollar - which served as a safe haven in 2018 - fell broadly, with the euro edging up to $1.1440 and the dollar index .DXY easing 0.25 percent to 95.94. Last week, amid intense pressure from USA policymakers including the United States president Donald Trump, the U.S. central had to step away from its much-debated monetary policy and interest rate hike, despite the inflation target had been closer to central bank's target (1.90 percent while the target was 2 percent).More news: Slim down or be grounded, Pakistan airline tells overweight cabin crew
Analysts at Bank of America Merrill Lynch noted global equity markets had lost $19.9 trillion since January previous year, and a record $84 billion had flowed out of stocks in just the past six weeks.
"As the trade tensions have eased we've seen the dollar weaken somewhat and in turn gold prices have been able to benefit", Cooper said.
The currency could not even hold early gains on the yen, lapsing back to 108.36.
Global foreign exchange market embraced the first day of the week with bumpy trading as fewer interest rate hikes later would lead to more hot money flowing in the market.More news: Gordon Ramsay’s 'uncomfortable' Sofía Vergara interview sparks Twitter outrage
Oil prices started firmer after Brent bounced about 9.3 percent last week, while WTI rose 5.8 percent.