Dollar at 3-year high

The dollar climbed to a three-year high on Monday and gold was hovering near a
three-year low after last week's strong U.S. jobs data fed expectations that the country's central bank could soon wind back stimulus.
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 dip in early European trading left it at 84.450. Friday's U.S. jobs data bolstered the view the Federal Reserve will soon start reducing its long-running stimulus programme, but analysts are now wondering whether the dollar's recent rise can 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."
After falls in Asia, Europe's broad FTSEurofirst 300
stock index started the week up 1 percent, regaining some of the ground lost at the end of last week. London's FTSE, Frankfurt's DAX and Paris's CAC 40 climbed 1 – 1.3 percent.
Investors expect Greece to reach a deal over its latest aid payment at a meeting of euro zone finance ministers later in the day, and there was relief after weekend moves to calm Portugal's
political crisis.
Europe's bond markets were calmer as a result with benchmark German Bunds and euro zone periphery debt all higher after last week's turmoil in Portugal and Greece and Friday's
strong U.S. data.