FOREX TODAY: US DOLLAR STRUGGLES TO RECOVER DESPITE CAUTIOUS MARKET MOOD (2)

EUR/USD gained traction to start the week and touched its highest level since mid-April above 1.0900 before retreating modestly in the early European morning. Over the weekend, European Central Bank (ECB) Governing Council member and Governor of Austria's central bank Olli Rehn said he sees grounds for "significant interest rate increases" from the ECB this winter and the coming spring. Meanwhile, the findings of a recently conducted Reuters poll showed that the ECB is forecast to opt for a 50 basis points (bps) hike at its February monetary policy meeting, while the policy rate is expected to reach 3.25% by mid-year.

GBP/USD climbed toward 1.2450 during the Asian trading hours on Monday but erased a large portion of its daily gains, pulling back toward 1.2400. In the absence of high-impact data releases, risk sentiment and the US Dollar's valuation could continue to drive the pair's action. 

In the early session on Tuesday, S&P Global will release the preliminary Manufacturing and Services PMI reports for Australia. Following last week's volatile action, AUD/USD trades slightly below 0.7000 early Monday.

USD/CAD fell sharply on Friday and closed the week below 1.3400. The pair stays quiet at around 1.3380 in the European morning. Statistics Canada will release the New Housing Price Index data for December later in the session, which is expected to come in at -0.2%.

Bitcoin climbed above $23,000 for the first time since August on Saturday but struggled to gather further bullish momentum. BTC/USD seems to have gone into a consolidation phase below $23,000 early Monday following Sunday's choppy action. Ethereum gained nearly 5% last week and registered gains for the fifth straight week. ETH/USD holds steady slightly above $1,600 to begin the week.