The dollar index, which measures the value of the US currency against a basket of six major currencies, fell 1.5 percent to 98.7 points.
The dollar weakened 1.7 percent against the euro, so the euro exchange rate reached USD 1.1720, reports Hina.
The price of the US currency also fell against the Japanese yen, by 0.2 percent, to 159.3 yen (JPY).
In March, the dollar strengthened significantly against most of the world's major currencies, as investors sought refuge in safer investments due to the crisis in the Middle East.
However, the dollar fell sharply as a two-week ceasefire agreement between the US and Iran boosted investor hopes that the Middle East crisis could soon be over.
The dollar is supported, however, by expectations that the US central bank will not cut interest rates this year, as inflation in the US is rising due to higher oil prices.
The latest data shows that in March, consumer prices in the US rose 3.3 percent year-on-year, mainly due to a jump in energy prices of almost 11 percent.
This shows that inflation has moved significantly away from the Fed's target level of around two percent.
Before the US and Israeli attacks on Iran, investors expected the Fed to cut interest rates twice this year by 0.25 percentage points, but now no interest rate cuts are expected this year.
As no agreement was reached between US and Iranian negotiators on the conditions for a lasting peace in Islamabad on Saturday, it remains to be seen what will happen in the global financial and oil markets next week.
