The agreement averted another partial government shutdown. A 35-day shutdown between December and January led to a furlough of 800,000 federal workers and cost the economy about $3 billion.
As a result of this deal, the US Treasury can ramp its short-term borrowing to rebuild a cash pile that has fallen to about $195 billion from $423 billion in late April, Morgan Stanley analysts said.
An increase in US borrowing would pare money in the banking system, which is seen supportive for the greenback.
"Excess reserves should decline, lending (dollar) support," Morgan Stanley strategists Hans Redeker, Gek Teng Khoo and Sheena Shah wrote in a research note.
The dollar's appeal got a boost after the International Monetary Fund raised its forecast on US growth in 2019 to 2.6pc while lowering its overall global growth outlook to 3.2pc for this year.
At 10:11 a.m. (1411 GMT), an index that tracks the greenback versus the euro, yen, sterling and three other currencies was up 0.39pc at 97.638. It touched 97.708, its highest level in about five weeks.
The dollar's strength also stemmed from broad weakness in the euro as investors gear up for news of fresh stimulus from the European Central Bank on Thursday.
Though money markets have trimmed bets on a 10 basis point deposit rate cut from the ECB to less than 40pc from roughly 60pc on Friday, analysts expect dovish forward guidance and possibly more generous terms for its planned new multi-year loans.
"The market has doubts in the ECB keeping its limited powder dry this week, the driving force behind the euro's leg lower," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The single currency fell to $1.1150, its lowest since May 31. It held at $1.1158, down 0.45pc on the day.
The euro dipped 0.22pc to 120.64 yen after touching 120.53, its lowest since Jan. 3.
Britain's pound slipped as Boris Johnson, who has promised to lead Britain out of the European Union with or without deal by the end of October, as expected will replace Theresa May as prime minister.
The pound was down 0.18pc at $1.2456, within striking distance of a 27-month low of $1.2382 reached last week. It was 0.26pc higher against euro at 89.585 pence after hitting a six-month low of 90.51 last week.