The dollar rallied to a two-month high against the yen as hopes for a Chinese revaluation of the yuan faded. The greenback also built on gains verses the euro in light of a U.S. budget proposal that is seen by some as a serious effort to tackle the deficit problem.
The yen briefly rose to a five-year high against the dollar Monday as investors bet next month's meeting of Group of Seven industrialized nations would urge Asian countries to let their currencies rise.
U.S. stocks rallied Friday in a bounce off recent declines and on bets that the strong, but lower-than-forecast January payrolls number means that the Federal Reserve will hold rates steady for some time.
Market participants were quick to label last fall's Group of Seven finance ministers' meeting in Dubai the "mini-Plaza" because, as at the famous confab at New York's Plaza Hotel in 1985, the get-together seemed to signal an agreement that the dollar needed to keep dropping.