The U.S. dollar faced heavy selling pressure during FOMC Chairman Jerome Powell's press conference late Wednesday and the U.S. Dollar Index recorded its largest one-day loss since early March, falling 0.87%.

The U.S. Dollar Index climbed to its highest level in nearly two years early Wednesday, fueled by aggressive Fed comments and strong data releases, after climbing 0.50% the previous session.

The greenback kicked off the week capitalizing 0.55% against most of its peers amid a broader cautious sentiment ahead of U.S. and U.K policymaker's announcements later in the week.

With hefty losses on Wall Street's main indexes on Wednesday, the U.S. dollar gained momentum versus its major rivals in the second part of the day and closed 0.46% higher.

After ending Friday's session 0.24% higher, the U.S. dollar index remains on the back foot, as the greenback struggles to find demand in the risk-on market environment.

The U.S. dollar index maintained its momentum from yesterday's session. After closing 0.15% higher, the index is edging up ahead of the European Central Bank's (ECB) widely anticipated policy announcements.

The U.S. dollar struggled to find demand amid improving market mood on Tuesday and closed 0.17% lower, nevertheless, the benchmark 10-year U.S. Treasury bond yield reclaimed 3% early Wednesday.

With the benchmark 10-year U.S. Treasury yield reaching above 3% on Monday, the U.S. dollar gained ground against its peers at the start of the week, closing 0.27% higher.

Yesterday, the DXY, which measures the greenback against a basket of major currencies, advanced 0.73% on the back of firmer US data which allowed market players to bet on further Fed rate hikes.

Markets remain risk-averse at the beginning of the week and the greenback capitalizes on safe-haven flows, reaching a near a 20-year high.