The greenback rose against the Japanese yen and Swiss franc from 99.31 to 100.90 and from 1.0105 to 1.0250 respectively on speculation that the Federal Reserve's moves to spur lending will restore confidence in credit markets and help revive U.S. economic growth. The better-than-expected U.S. existing home sales also provided support to the dollar.

U.S. stocks rallied on Monday to the highest levels this month as JPMorgan Chase & Co. quadrupled its bid for Bear Stearns Cos. to about $10 a share from the initial bid at $2 per a share. The Standard & Poor's 500 Index and the Dow Jones Industrial Average rose by 1.5% on Monday. U.S. sales of existing homes unexpectedly rose to an annual rate of 5.03 million in February, the first time in seven months.

The New York Federal Reserve said it would provide $29 billion in term financing to facilitate JP Morgan's acquisition of Bear Stearns and will form a privately managed company to oversee assets pledged as collateral.

The single currency fell initially to 1.5341 against the dollar in Asia and then rebounded to 1.5456. The British pound also rebounded from 1.9760 to 1.9876 on renewed cross buying in sterling especially versus the Japanese yen and euro.

Most financial markets were shut for the Easter holidays on Monday and will reopen on Tuesday. Tuesday will see the release of U.S. consumer confidence and house price index.