Dollar declined in European trade against a basket of major rivals after a two-day hiatus from losses, following remarks from Fed officials on a potential US recession.
Dollar was also pressured by weak demand on safe havens as the banking crisis eases with authorities moving briskly to support the banking sector.
The Index
The dollar index fell 0.15% to 102.98, with a session-high at 103.22, after rising 0.5% on Friday, the second profit in a row off seven-week lows at 101.92.
The index lost 0.7% last week, the second weekly loss in a row following Fed's meeting which sparked speculation about the end of the current policy tightening cycle.
Fed Remarks and Rates
Minneapolis Fed President Neil Kashkari said the recent pressures on the banking sector and the potential for a credit crisis later made the US closer to recession.
Pricing for no change in US interest rates at the May 3 Fed meeting stand at 80%, while pricing for 0.25% rate hike stands at 20%.
Banking Fears Subside
In the US, authorities continue to take measures to underpin the US banking sector and restore confidence.
US authorities believe the banking sector is strong and flexible despite ongoing pressure on some institutions.
Authorities also study an emergency lending program to banks to support struggling banks like First Republic.
Already, the First Citizens BankShares agreed to purchase Silicon Valley Bank in a deal valued at $16.5 billion that carries all of the bank's deposits and loans.