The dollar slipped on Monday as investors kept up selling pressure, cutting bets on further dollar gains from rising U.S. rates, while turning hopeful that loosening lockdowns in China can help global growth and exporters' currencies.

U.S equity futures bounced sharply in the Asia session and pulled the region's risk-sensitive currencies along for the ride, even as Asia's stockmarkets wobbled.

The Aussie rose 0.5 per cent to $0.7091 and has lifted 3.8 per cent in a week and a half. The kiwi rose 0.8 per cent to $0.6458, a three-week high.

"It's a reasonably positive start to the week," said National Australia Bank's head of foreign exchange strategy, Ray Attrill.

"The U.S. dollar looks, for the time being, to be losing upside momentum," he said, tracking a small rally in U.S. bonds that has driven yields lower in recent sessions.

The euro and yen rose, with the Japanese currency up 0.4 per cent to 127.35 per dollar and the euro up 0.2 per cent at $1.0586 following last week's 1.5 per cent gain on the dollar.

The U.S. dollar index, up about 16 per cent to a two-decade high over the 12 months to the middle of May, was down about 0.23 per cent at 102.680 and has lost roughly 2 per cent in a week.

The safe-haven Swiss franc rose too, holding on to sharp gains made last week - its best since March 2020 - when it climbed from parity on the dollar to about 0.9716 per dollar.

"The dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China," said Commonwealth Bank of Australia strategist Joe Capurso.

"Given the type of policy support, we expect investment to rebound faster than consumer spending," he said. "Investment is mining commodity-intensive (and therefore) very positive for commodity currencies such as the Australian dollar and Canadian dollar, in addition to the yuan."

CHINA HOPE

Shanghai is edging out of lockdown and an unexpectedly big rate cut in China last week has been taken a signal that authorities are going to provide support to a recovery.

The city of 25 million expects to lift its city-wide lockdown and return to more normal life from June 1.

The yuan had its best week since late 2020 last week and firmed to 6.6844 per dollar on Monday.

The Canadian dollar rose for a third straight week last week and was up about 0.4 per cent to C$1.2800 per dollar on Monday.

Sterling leapt nearly 2 per cent last week on the back of stronger-than-expected retail data and markets' broader re-think on whether global central banks are really lagging much behind the Federal Reserve. It was last up 0.4 per cent at $1.2546.

Geopolitics are in focus in Asia this week as U.S. President Joe Biden tours the region, promoting greater U.S. economic engagement and seeking to push back against China's influence.

He met Japan's Prime Minister Fumio Kishida on Monday ahead of meetings with the leaders of India and Australia in Tokyo this week.

Australia elected a new government on Saturday, though the market reaction was muted as polls had predicted victory for the centre-left Labor Party and it is not expected to shift the direction or pace of interest rate rises.

The Reserve Bank of New Zealand is expected to lift its benchmark cash rate by 50 basis points on Wednesday. U.S. Federal Reserve meeting minutes are also due on Wednesday./Reuters