Euro rose in European trade against dollar to near two-month highs as the greenback weakens, amid altered estimates for the future of the European Central Bank's monetary policies. 

EUR/USD rose 0.25% to 1.1435, with an intraday low at 1.1399, after closing down 0.4% on Friday, the first loss in four days on profit-taking away from two-month highs at 1.1482. 

The euro rose 0.5% last week against dollar, the third weekly profit in a row. 

The dollar index fell over 0.1% on Monday after a hiatus from losses on Friday against a basket of major rivals. 

Investors await fresh data on the pace of new evidence supporting rate hikes in the US this year and changing the general budget of the Federal Reserve.

In Europe, analysts now expect a tightening of policies this year after inflation hit another record high in December. 

Oil prices rose on Friday, to head for weekly gains, despite the US dollar's rise against most currencies.

Oil is being lifted by the gradual recovery in global demand, despite the lingering concerns over the coronavirus and its impact on the market.

China agreed to a US request to withdraw from its strategic oil reserves by February.

OPEC-Plus agreed to keep its production policy unchanged with an increase of 400,000 barrels per day in February.

Data showed on Wednesday that US crude inventories fell more than expected during the past week.

The dollar index rose against a basket of major currencies by 0.5% to 95.2 points as of 18:00 GMT, after hitting a high of 95.2 points and a low of 94.6 points.

WTI February futures rose 2.2% to $83.9 a barrel, as of 17:56 GMT.

Brent March futures rose 1.7% to $85.9 a barrel.

The Australian dollar fell against most currencies on Friday, as investors shy away from risk assets and following the coronavirus pandemic developments.

A Moderna official stated that the coronavirus could start moving into an endemic phase in 2022 such as seasonal influenza.

However, WHO officials stressed that it is too early to consider Covid-19 an endemic disease, as countries continue to suffer from the new variant Omicron.

US Federal Reserve Chairman Jerome Powell and several Fed officials have hinted at the near start interest rate hikes to curb inflation.

The US retail sales index fell 1.9% in December, while analysts expected the index to hold unchanged.

As of 16:46 GMT, AUD/USD fell 0.7% to 0.7226, after hitting a high of 0.7295 and a low of 0.7222.

Palladium prices fell on Friday, as the US dollar rose against its peers, following Federal Reserve officials' statements.

Federal Reserve Chairman Jerome Powell and several Fed officials have hinted at the near start interest rate hikes to curb inflation.

This comes after the US consumer price inflation jumped by 7% during December, which is the highest level in 39 years.

However, US President Joe Biden sees a slowdown in prices, and Powell expected a drop in inflation when the economy returns to normal.

The dollar index rose against a basket of major currencies by 0.1% to 94.9 points as of 14:40 GMT, after hitting a high of 94.9 points and a low of 94.6 points.

Palladium March futures fell by 0.7% to $1,876 an ounce, as of 14:41 GMT.