The euro, the pound and some trade-sensitive currencies rallied as the dollar slid to a six-month low today.
Investors are confident that global growth prospects are improving and that US-China trade relations are getting significantly better.
After staying strong for much of 2019 thanks to the relative outperformance of the US economy and investors' preference for a safe-haven currency amid the trade dispute between Washington and Beijing, the dollar's gains for the year have shrank in December.
The buoyant end-of-year sentiment enocouraged investors to buy up currencies linked to trade and global growth.
This sent currencies such as the Australian dollar, Chinese yuan and Scandinavian crowns to multi-month or multi-week highs against the greenback.
The dollar index was last down 0.3% at 96.435, its weakest since July 1.
In thin volumes on the last day of the decade, currencies were also more volatile than many had expected.
Analysts did not attribute the moves to any specific new developments.
"I can't see much reason for the movement in the FX market except end-year position squaring, or just being careful and cutting positions ahead of the New Year's holiday and the start of 2020. As a result I wouldn't draw any big conclusions from it," said Marshal Gittler, currency analyst at ACLS Global.
Chinese Vice Premier Liu He will visit Washington this week to sign a Phase 1 trade deal with the US, the South China Morning Post reported earlier this week.
White House trade adviser Peter Navarro said the trade deal would likely be signed in the next week, but that confirmation would come from President Donald Trump or the US trade representative.
Investors' appetite for risk helped drive the euro up 0.3% to $1.1230, a new four and a half month high.
Signs that the euro zone economy may be stabilising have lifted the common currency in recent weeks as investors unwound short positions, though the currency has shed around 2% of its value against the dollar in 2019.
Meanwhile, sterling hit new two-week highs against the dollar.
However, the possibility of a 'no-deal' Brexit at the end of 2020 means the currency is still not close to where it was on December 12, the day Prime Minister Boris Johnson won the British election.
The pound galloped 0.8% to as high as at $1.3212 and was 0.5% stronger against the euro at 85 pence.
Sterling has gained around 3.5% against the dollar in 2019 and 5.4% compared to the euro as fears of an imminent disorderly exit from the European Union eased and then lifted with the passing of Johnson's Brexit withdrawal agreement in parliament.
The US dollar was weak across the board, cutting 2019 gains for the index that tracks the greenback against a basket of currencies to 0.3%.
MUFG analysts saw a "bearish technical development for the US dollar that signals an increasing risk of further weakness ahead".
"Weakness in the US dollar towards the end of this year has coincided with the renewed expansion of the Fed's balance and the paring back of pessimism over the outlook for global growth," they said.
Against the Japanese yen, the dollar fell to a near three-week low of 108.50 yen and was last down 0.4%.