The greenback strengthened as far as $1.1742 to the single currency , extending a 0.6% pop from Friday, when a strong U.S. jobs report stoked bets that a reduction in asset purchases could start this year and higher interest rates could follow as soon as 2022, Reuters reported.
The dollar index, which tracks the U.S. currency against six rivals, rose to a two-week top 92.915.
The dollar also hit an almost two-week high of 110.37 yen.
"U.S. payrolls were a game-changer," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.
The dollar index is eyeing a close above 93, while the currency could head for $1.1704 per euro, Weston wrote, adding that it could climb further versus the yen too should U.S. yields continue to tick higher.
The benchmark 10-year Treasury yield jumped 8 basis points on Friday to a two-week high of 1.3053%. There was no trading in Tokyo on Monday with Japan shut for a national holiday. Singapore markets were also closed.
Friday's non-farm payroll report showed jobs increased by 943,000 in July compared with the 870,000 forecast by economists in a Reuters poll. Numbers for May and June were also revised up.
The Fed has made the labor market recovery a condition of tighter monetary policy, and most officials back the view that a jump in inflation will prove transitory, though there is debate over how prolonged it could be.
Traders will be keenly watching a U.S. consumer price report on Wednesday.
Last week, Fed Vice Chair Richard Clarida suggested that conditions for hiking interest rates might be met as soon as late 2022.
The dollar rallied against its Australian and New Zealand counterparts on Monday, jumping 0.3% to as high as $0.7330 per Aussie and up 0.4% to $0.6980 per kiwi.
This article has been amended from its original source.
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