Early trading in the week saw the US dollar remain firm at a two-month high against its main rival.
Market expectations for an interest rate hike by the Federal Reserve (Fed) at the June meeting have increased following last week's US personal consumer expenditure (PCE) data.
The central bank's favorite measure of inflation showed an increase of 4.4% year-on-year in April from 4.2% previously.
This causes the market to see a 70% chance of an interest rate hike by the Fed in June.
Even so, Bank of America remains of the view that the Fed will not hike next month, saying three conditions must be met in order to raise rates.
Among them are strong economic data, a solution to the debt ceiling issue and pressure on regional banks easing.
Some of the key data that investors are focused on this week are the US NFP manufacturing and employment reports.
On the debt ceiling, both Democrats and Republicans reached an agreement over the weekend, bringing some relief to markets.
However, the currency reaction in the Asian session was seen to be quite limited with market movements expected to remain limited throughout the day due to many banks being closed in conjunction with public holidays in the UK, France, Germany, Switzerland and the United States.
The euro and pound remained gloomy with each trading at two-month and one-month lows against the US dollar.
The Aussie and New Zealand dollars remained mired at six-month lows as investors focused on Australian inflation data on Wednesday.
