The Bloomberg Dollar Index continued its decline on Monday, marking a cumulative drop of over 1% across two sessions. Currencies from the Group of Ten nations broadly appreciated against the U.S. dollar, with the British pound underperforming as concerns mounted over the political future of UK Prime Minister Keir Starmer.

The Bloomberg Dollar Index fell for a second consecutive day, declining as much as 0.7% intraday to its lowest level since January 30.

The Japanese yen strengthened against the dollar. Following a historic election victory for the Liberal Democratic Party led by Prime Minister Takaichi Sanae, Japan's top currency official, Atsushi Mimura, stated that the government is monitoring market developments with a high sense of urgency as always.

The USD/JPY pair fell more than 1% at one point, touching 155.52 during the session, before paring some of its losses.

Shaun Osborne, Chief FX Strategist at Scotiabank, noted that Prime Minister Takaichi Sanae's reassurances on fiscal plans after the election victory have calmed markets. A more constructive outlook on fiscal prospects could potentially drive the USD/JPY pair down toward 155 or even lower levels.

The GBP/USD pair rose 0.65% to 1.3698. Meanwhile, the EUR/GBP pair increased approximately 0.25% to 0.87012, marking its third gain in four trading sessions.

Members of Prime Minister Starmer's cabinet voiced their support for him on Monday, buying time for the UK leader to stabilize his precarious position. This followed calls for his resignation from the leader of the Scottish Labour Party.

The EUR/USD pair advanced 0.85% to 1.1916, resulting in a two-day cumulative gain exceeding 1%.