Risk appetite has picked up since Friday, when Federal Reserve Chairman Ben Bernanke said the Fed will consider a wide range of options to support the sluggish U.S. recovery at its two-day September meeting.
A speech at Jackson Hole by European Central Bank President Jean-Claude Trichet was a non-event, with the outgoing leader offering no hint of the ECB's next move on interest rates.
Meanwhile in Europe, merger news is helping drive bank stocks sharply higher, as Greek lenders Alpha Bank and Eurobank will combine to form the country's largest bank.
The euro rose to $1.4549 versus the dollar, edging to the higher end of a stubborn recent trading range. It's the highest level for the euro against the dollar since the first week of July.
In economic news from the U.S., consumer income and spending both increased in July, according to figures released Monday by the Commerce Department, with spending rising by more than anticipated.
Personal income rose 0.3 percent or $42.4 billion in July, while revised June figures showed a bigger than initially reported 0.2 percent increase in income. Initial figures had reported a 0.1 percent increase in June.
The euro extended its strong rebound versus the Swiss franc, rising to a monthly high of CHF 1.1875.
With Swiss authorities successfully talking down the franc, the euro has pushed well away from a record low of near parity.
On the other hand, traders have turned a deaf ear to officials in Japan trying weaken the yen. The euro was fractionally higher near Y111.50 versus the yen today, but remains near last year's record low below Y106.
Japanese Finance Minister Yoshihiko Noda was elected Monday as head of the ruling Democratic Party of Japan, edging out Trade and Industry Minister Banri Kaieda. He will succeed Prime Minister Naoto Kan who resigned on August 26.
European officials on Sunday accused International Monetary Fund managing director Christine Lagarde of making a "confused" and "misguided" statement on the health of Europe's banks, the Financial Times reported.
In her address at Jackson Hole Lagarde called for an "urgent" recapitalization of Europe's weakest lenders and stressed on the need to shore up the banking system.
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