The US dollar fell to a more than two-week low against the euro as the common currency enjoyed a boost from the recently announced proposal for a common fund that could move Europe closer to a fiscal union as it tries to counter the economic hit from the coronavirus pandemic.

The euro also found strength from survey data on Tuesday that showed German investor sentiment improved much more than expected in May.

The euro was up 0.63% at $1.0992, its highest since May 1.

The US dollar, which draws flows when investors shun risk, was broadly weaker on the day as investors clung to hopes of a recovery from a coronavirus-fueled slump.

The US Dollar Currency Index, which measures the greenback's strength against six major currencies, was down 0.52% at 99.04, on pace for its third straight day of losses.

The risk sensitive Aussie dollar rose 0.93% to a 10-week high against the US currency.

Sterling was 0.15% higher against the US dollar but clouds lingered over the pound after UK inflation fell below 1% to its lowest in nearly four years.