The greenback dollar strengthened in the European session, helped by the strengthening of US treasury yields as market focus is now targeted at the FOMC policy meeting this week.
The benchmark 10 -year government bond yield traded at 1.6320% on Monday, not far from the one -year high it reached on Friday of 1.645%.
The dollar index traded stronger around 91.84 in the European opening session.
The Japanese yen, which is sensitive to rising US bond yields, traded weaker against the US dollar.
Rising bond yields are expected to continue to drive the market this week ahead of the Federal Reserve (Fed) meeting, at which analysts believe policymakers will make optimistic statements about the U.S. economy.
The euro fell 0.2% as the market is now plagued by concerns over the Covid-19 case which is back on the rise, adding to fears over Europe which is far behind in vaccination campaigns compared to the US and UK.
Italy is back to implementing tighter sanctions from March 15 to April 6, after seeing an increase in daily Covid-19 cases, which involve half of the country’s 20 provinces.
Meanwhile, the pound traded steady around the 1.39300 price level against the US dollar following a statement by the Governor of the Central Bank of England (BOE), Andrew Bailey that was positive on the UK economic recovery despite the unequal impact of Covid.
