The dollar edged lower against the euro, ahead of U.S. inflation data and a series of speeches from Federal Reserve officials that could yield clues on whether a cut in U.S. interest rates is likely this year.
The euro crept higher across the board, tracking a rise in euro zone bond yields, which hit multiyear highs on a view that the European Central Bank will raise rates at least once more this year.
But the dollar posted modest gains against the yen, and was little changed against an index of six major currencies, with overall trading subdued ahead of Tuesday's report on April consumer prices in the United States.
"We've got a tug of war between the health of the U.S. economy and the inflation outlook, so tomorrow's number takes on a bit of added importance," said John McCarthy, head of foreign exchange trading at ING Capital Markets in New York. "If the number is moderate then we could see the dollar come under more pressure."
The euro was , within a couple of cents of an all-time peak above $1.3680 set in April, and was also up versus the yen , within sight of another record high set this month.
Against the yen, the dollar was , but still short of a two-month high above 120.50 hit last week.
Most investors are still betting that the Federal Reserve will cut interest rates later this year to shore up a slowing economy. But stubbornly high readings of inflation have complicated the picture, and suggested to some that the Fed will hold rates steady for longer than previously thought.
Core consumer prices, which strip out the effect of volatile energy and food prices, are expected to show a rise of 0.5 percent for April, slightly below the 0.6 percent pace logged in the previous month, a Reuters poll shows.
Investors will also be on the lookout for speeches from a host of Fed speakers this week, which includes Dallas Fed President Richard Fisher and Atlanta Fed President Dennis Lockhart on Monday and a speech by Chairman Ben Bernanke later in the week.
The kiwi dollar was one of the day's best performing currencies, rising and getting closer to a 22-year high just below $0.75 hit in April.
An unexpectedly strong report on New Zealand retail sales in the first quarter rekindled talk that the country's central bank may have to further raise interest rates -- already the highest in the industrialized world -- to cool the economy.
Later in the week, the yen could be in the spotlight. Data on Thursday is forecast to show solid Japanese economic growth in the January-March quarter, which would likely help set the stage for a BOJ rate hike following elections for Japan's upper house of parliament in July.
The BOJ is expected to leave rates on hold at 0.5% after a two-day policy meeting that ends Thursday.