The safe-haven yen and Swiss franc fell for a second straight session against the US dollar on Tuesday, with risk appetite growing as investors were encouraged that the Chinese government was taking measures to contain the coronavirus and limit its economic fallout.
Currencies such as the Australian dollar and offshore Chinese yuan climbed.
The People's Bank of China (PBOC) has pumped in hundreds of billions of dollars into the financial system this week. In the past two days, the PBOC has injected 1.7 trillion yuan ($242.74 billion) through open market operations.
"It feels like the containment measures and getting more information about the virus have helped the market and so investors are not so worried about uncertainty," said Thomas Anderson, managing director at moneycorp North America.
"I think people overreacted last week and now they're unwinding that overreaction," he added.
"China pretty much jumped into everything they needed to do to stabilize the market and it worked."
In late morning trading, the dollar rose 0.5% against the yen to 109.26 yen, and gained 0.3% versus the Swiss franc to 0.9690 franc.
Gains against the yen and franc helped push the dollar index higher to 97.922, up 0.1% on the day.
The euro, meanwhile, slipped 0.1% against the dollar to $1.1040.
The Australian dollar rose 0.5% to US$0.67285, pulling away from a 10 1/2-year low of $0.6670 touched last October, after the Reserve Bank of Australia left its main cash rate unchanged at 0.75%.
The offshore yuan rose against the dollar, which fell 0.3% to 6.9935.
Elsewhere, sterling rebounded from a near-six week low against the US dollar to trade 0.3% higher at $1.3028. Sterling has been under pressure from worries over a hard Brexit amid a tough stance taken by Prime Minister Boris Johnson on European Union trade talks.
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