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.

The U.S. dollar index (DXY) climbed 0.83% on Monday, reaching its highest level since December 2002, fueled by hawkish Fed expectations.

The greenback reacted tamely to the interest rate hike announcement from the Federal Reserve as policymakers met investors' expectations in an attempt to control inflation.

The U.S. dollar index eased on Tuesday, giving back some of its recent gains after closing flat on Monday.

The U.S. dollar index is relatively quiet on early Monday, after closing 0.18% lower in the last session.