Euro fell in European trade off four-week high against dollar on track for the first loss in four days on active profit-taking.
Dollar recently rebounded after US President Joe Biden vowed to take measures to protect the US banking sector.
As confidence rebounds in the success of such measures to contain the fallout of the Silicon Valley Bank's collapse, investors now await important inflation data later today.
EUR/USD fell 0.4% to 1.0679, with a session-high at 1.0730, after rising 0.8% on Monday, while marking four-week highs at 1.0748 following the collapse of the Silicon Valley bank in the US.
European Rates
Investors now await data on the European Central Bank's meeting to gather clues on the future path of policies.
ECB President Christine Lagarde vowed to do all that's required to bring prices back to stability.
It's expected the ECB will take a bullish tone this week after strong euro zone consumer prices data.
Analysts expect the ECB to hike interest rates by successive 0.5% hikes in March, May, and June, with a 0.25% hike in July.
The Dollar
The dollar index rose 0.4% today off month lows at 103.48, on track for the first profit in four sessions against a basket of major rivals.
US President Joe Biden attempted to reassure the markets, calling for confidence in the banking system following the Silicon Valley Bank collapse, the second largest banking collapse since 2008.
Biden asserted consumers deposits are always protected, calling for small companies nationwide to deposit cash into banks to support liquidity.
Biden added that taxpayers won't carry any losses due to this crisis, noting that money paid for depositors will come from fees that banks pay in the deposits insurance fund.
Following Biden's remarks, odds for a 0.5% rate hike by the Fed in March surged once more to 53%, while odds for a 0.25% hike fell to 47%.