The dollar climbed to a three-year high on Monday and gold was hovering near a three-year low, as last week's strong U.S. jobs data continued to feed expectations of a stimulus cut by the country's central bank.
The dollar index, which measures the greenback against a basket of major currencies, rose to 84.588, its highest since July 2010, before a slight drop back in early European trading left it at 84.436.
Friday's better-than-expected U.S. jobs data bolstered the view the Federal Reserve will start reducing its long-running stimulus programme, but analysts are now wondering whether the dollar's recent rise will continue at the same pace.
"Clearly the dollar is on the front foot and so the question is: can it sustain the momentum?," said Rabobank senior currency strategist Jane Foley.
"As it gains ground it acts as implicit monetary tightening so that could make some of the Federal Reserve governors quite nervous. I do think there will be plenty of opportunity to take some profits in these dollar positions."
Europe's broad FTSEeurofirst 300 stock index started the week up 0.8%, regaining some of the ground lost at the end of last week as investors focused on Greece as it looks set to reach a deal with its lenders over its latest aid payment.
Portugal's recent crisis also appeared to ease over the weekend after the country's prime minister promoted the head of the junior coalition party to be his deputy in a bid to defuse the country's political rift.
In the bond market, German Bund futures rebounded from Friday's sell-off and euro zone periphery debt also saw early gains.
Gold, often favoured by investors as a hedge against inflation, hovered near a three-year low at $1,220.59 an ounce, meanwhile. It has dropped 10% since Fed Chairman Ben Bernanke said last month the U.S. could scale back stimulus.