Investing.com – The dollar fell against a basket of major currencies on Monday as geopolitical uncertainty resurfaced while strong gains in sterling added to downside momentum in the greenback.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.15% to 93.48.

Geopolitical uncertainty resurfaced after U.S. President Donald trump tweeted over the weekend that years of talks with North Korea over its nuclear buildup have failed, and “only one thing will work” to curb the isolated nation’s efforts to develop nuclear weapons.

Defense Secretary Jim Mattis on Monday urged military leaders “to be ready” with military options for President Donald Trump to deal with North Korea should diplomacy fail.

“Right now it is a diplomatically led, economic sanctions-buttressed effort to try to turn North Korea off this path,” Mattis said. “Now, what does the future hold? Neither you nor I can say, so there’s one thing the U.S. Army can do, and that is we have got to be ready to ensure that we have military options that our president can employ if needed.”

The remarks come ahead of the annual celebration of the founding of North Korea’s ruling communist party slated for Tuesday, at which Pyongyang could demonstrate some show of military strength to mark the anniversary.

Also adding to dollar weakness was a strong rebound in sterling, as political uncertainty eased after members of Prime Minister Theresa May’s Conservative party rallied around the Prime Minister following recent criticism from former Conservative chairman Grant Shapps.

GBP/USD rose by 0.69% to $1.3156, while EUR/USD gained 0.19% to $1.1754.

USD/CAD tacked on 0.06% to C$1.2536 while USD/JPY added 0.06% to Y112.65.

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