The dollar continued to strengthen against most of the major currencies amid a relatively thin economic calendar ahead of the Christmas holiday on Friday. Euro recovered to 1.4373 on cross buying in euro due to the firmness in European equities, however, the U.S. stock markets' advance sparked a dollar rally in New York and euro declined to 1.4267 later in the day.

The British pound briefly rose to 1.6164 in Asian morning but tumbled to an intra-day low of 1.6030 on active cross selling in sterling especially versus euro (eur/gbp rose from 0.8862 to 0.8929).

Yen traders will be the most active this week with Asian markets having a full schedule and a number of Japanese economic indicators due for release. The BoJ released their monthly report on Monday in which they still pointed towards a continued recovery but showed a slightly more cautious outlook for exports and production. The yen fell below last Friday's low at 90.91 to 91.24.

Data to be released on Tuesday include New Zealand current account, Australia Westpac leading economic index, Germany Gfk index, Swiss trade balance, U.K. current account, US GDP, PCE, new home sales, new home sales.