The greenback, which rose late last week as nervous investors cut holdings of higher-yield, higher-risk currencies and assets, turned lower against most major currencies on Monday as Federal Reserve Chairman Ben Bernanke edged closer to winning support for a second term, which helped ease anxiety among investors.

Despite euro's brief dip to 1.4112 in Australia, the single currency rebounded on short-covering. Price reached intra-day high of 1.4195 in European mid-day after German Economy Minister Rainer Bruederle said German government is prepared to act if financing problems grow and news of higher-than-expected orders for Greek bond (orders for Greece's 5-year benchmark have topped 9.0 billion euros) came out. However, the single currency retreated from there and reached as low as 1.4129 after U.S. existing home sales fell by 16.7% to 5.45 million unit annual rate versus economists' forecast of a decrease of 10.0% to 5.90 million. Euro eventually ended the day down less than 0.01%.

Although cable has traded sideways in Asia, it began to displayed strength after Europe has opened. Britain's Prime Minister Gordon Brown said 'we will recoup money' that the banks have been given and even turn a profit on it. Brown also said his call for international financial levy gaining ground and danger of banks seeking to return to 'bad old ways' on bonuses. The news lifted the sterling higher and price rose to 1.6262 in NY afternoon before retreating.

Data to be released on Tuesday include Japan BOJ rate decision, Germany Ifo index, EU current account, U.K. GDP, U.S. consumer confidence. Monday is a public holiday in Australia.