NEW YORK (TheStreet) -- The U.S. dollar was mostly lower Monday with little movement among the majors. The euro remains fairly subdued but recovered early session losses to break above Friday's close.
This week in Europe will be dominated by upcoming political events in Italy, Ireland and the European Union summit, in which EU leaders aim to agree to a limited EU treaty change in order to set up a permanent rescue mechanism for countries in financial duress.
Cable, meanwhile, continues to experience selling pressure following weaker-than-expected housing prices but most of the weakness is highlighted in the crosses with larger moves down vs. the euro.
The dollar has been well-bid vs. the yen amid the large swing in U.S. yields with the 10-year Treasury now yielding 209 basis points above its JGB counterpart following recent firm U.S. data and the possibility of the extension of the Bush-era tax cuts.
Elsewhere, the Australian dollar has been moderately higher buoyed by higher stocks and commodity prices with the AUD/JPY making a three-week high as China refrained from raising interest rates, despite the headline inflation print of 5.1%.
Eurozone spreads continue to rattle the markets led by Spanish 10-year government bonds, which declined for a sixth consecutive day before debt sales this week. The yield on the 10-year is up by 2 basis points followed by a 1 basis point increase in Italian 10-year yields.
Tensions in the eurozone periphery are also high ahead of Wednesday's Irish Parliament vote on the EU/IMF rescue package, which the opposition party, Fine Gael, has said it will vote against and seek renegotiation.
At the same time, the German 10-year yield is flat while the U.S. Treasury yield rose 3 basis points. Ten-year JGB yields were up 5 basis points as global growth expectations reduce the demand for safe-haven assets.
