The dollar reached a two-month high against a basket of currencies and a one-month high against the yen on Monday, after Federal Reserve Chair Janet Yellen fanned expectations the Fed would raise U.S. interest rates soon.
Political developments in Tokyo were also supporting the dollar against the yen. Japanese Prime Minister Shinzo Abe said he would delay a sales tax increase scheduled for next April by two and a half years, a senior ruling party official said on Monday.
Japan is also expected to compile a supplementary budget to stimulate the sputtering economy, a move which is widely expected to be followed by further monetary easing by the Bank of Japan, all of which undercut the yen.
Volumes dwindled in Europe with both London and U.S. markets closed for public holidays.