US President Donald Trump on Friday outlined the first phase of a deal to end the trade war and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.
The safe havens gained on Monday after Bloomberg News reported China wants more talks as soon as the end of October to hammer out the details of the "phase one" deal.
US Treasury Secretary Steven Mnuchin also said on Monday an additional round of tariffs on Chinese imports will likely be imposed if a trade deal with China has not been reached by the time they are set to start, but added that he expected the agreement to go through.
Across the Atlantic, a deal to smooth Britain's departure from the European Union hung in the balance on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and said a full agreement was unlikely this week.
"Caution returned to markets as players realized that nothing has significantly changed with respect to the US-China trade war and Brexit," said Joe Manimbo, senior market analyst, at Western Union Business Solutions.
"The fact that nothing materially has changed and that uncertainty remains elevated served as a reality check and excuse for investors to play it safe," he added.
Analysts said the partial trade deal between the world's two largest economies appeared to lack substance with limited progress on structural issues such as technology transfers.
In afternoon trading, the dollar index rose 0.2% to 98.468m up from a three-week low reached on Friday.
The dollar was slightly weaker against the yen, however, down 0.1% at 108.36 yen.
Trading volumes were thinner than usual with Tokyo's market closed for a public holiday and a holiday in the United States for Columbus Day.
Emerging market currencies and those closely linked to broad risk sentiment, such as the Australian dollar and Swedish crown, slipped, after rallying at the end of last week.
Sterling also dropped against both the dollar and euro, after Britain and the EU stressed over the weekend that there was a long way to go before they could agree a Brexit deal. Sterling surged late last week after London and Brussels announced "intense" negotiations to try and agree a Brexit deal before October 31.