Euro relinquishes gains as dollar regains footing

Euro returned lower in Asian trade after a positive start, trimming its gains and embarking on a decline as the dollar regains its footing on short-covering. 

Dollar settled near a three-year low against a basket of major currencies, as investors await the latest developments with the US government shutdown, while many traders believe the shutdown has already been priced in the dollar previously. 

European markets on the other hand are optimistic towards a potential deal between German parties to form a governing coalition despite current disagreements. 

Investors anxiously await the European Central Bank's meeting later this week and its press releases on inflation and the future of monetary policy, especially after recent strong gains in the euro exchange rate. 

EUR/USD last traded at 1.2230, down from the opening of 1.2269, with an intraday high at 1.2271, and a low at 1.2224.