The dollar rose against a basket of major currencies on Monday on traders' bets that China and the United States are moving closer to a trade deal that would end sparring between the world's two biggest economies. The greenback gained for a fourth straight day, bolstered by the rise in US bond yields with benchmark 10-year yields hitting one-month peaks last week.
The gap between benchmark 10-year yields in the United States and Germany has widened to 257 basis points from 240 basis points at the beginning of the year. The United States and China appeared to be close to a deal that would roll back US tariffs on at least $200 billion worth of Chinese imports, a source briefed on negotiations said on Sunday, but the timing and details for a deal remained unclear.
"Constructive reports on US-China trade fuelled optimism that the world's two biggest economies might be weeks away from a formal breakthrough," Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
At 11:05 a.m. (1605 GMT), the ICE dollar index was up 0.24 percent at 96.756.
The Chinese yuan edged up 0.1 percent to 6.7089 to the dollar in offshore trade, close to last week's 7 1/2-month high of 6.6737.
The euro was notably weaker against the greenback, falling 0.39 percent at 1.1324.
Some analysts now expect a fresh round of bank funding at a European Central Bank meeting later this week that would boost the dollar. The greenback was hovering near a 10-week high of 112.08 yen reached on Friday. It was last at 111.805 yen, marginally lower on the day.