Talks between the European Union and Britain on Brexit are being conducted in a spirit of "good cooperation," Michel Barnier, the EU's chief negotiator on the issue, said on Monday.

Britain is due to leave the EU on March 29, 2019 but no full exit agreement has been reached.

Reports of progress on the key Irish border question helped boost the British pound.

The euro was 0.49 percent higher against the dollar at $1.1685. Sterling was 0.72 percent higher against the greenback.

"Clearly the market is getting a little excited about the EU summit later in the week and the potential for a sterling-favorable resolution there," said Brad Bechtel, managing director FX at Jefferies, in New York.

The first of three summits on the terms of Brexit will be held this week, and EU leaders hope a deal can be struck by November. The talks could determine how orderly Britain's withdrawal will be and what kind of economic impact it and its neighbors face.

The euro was also supported by an improving technical picture, said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, referring to the common currency breaking above its 100-day moving average last week.

A mild recovery in emerging market currencies during US trading hours on Monday was also exerting some pressure on the dollar, Jefferies' Bechtel said.

MSCI's emerging market currency index down 0.21 percent, after falling by as much as 0.4 percent, earlier in the day.

TRADE TENSIONS

The dollar, which in recent months has benefited from safe-haven flows as the Sino-US trade conflict worsened, was on the defensive on Monday.

US President Donald Trump said on Monday he would announce his latest plan on China tariffs after the markets close, with expectations he would levy them on about $200 billion of Chinese imports.

The news of the impending announcement sent the greenback to a fresh session low against the yen. The Japanese currency is often viewed as a safe-haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan's current account surplus.

Investors seem inclined to lock in dollar gains made since the spring ahead of next week when the Federal Reserve meets and is expected to raise interest rates for the third time this year, said Manimbo.