In Europe, Italy has until Monday to explain to the Commission its breach of rules and faces the rejection of its budget, which may eventually lead to sanctions.
The Italian government expects the European Commission to decide for the first time ever on Tuesday to ask a member state to revise its draft budget, a government source said on Sunday.
Italian bond yields hit their highest level since early 2014 on Friday and the premium investors demand in comparison to German debt is at a five and a half year high.
Italy is expected to be on the agenda when the European Central Bank meets on Thursday. The bank is considered certain to keep policy on hold and likely put off discussion about its reinvestment policy until December.
The euro started the week steady at $1.1511 having bounced from support at $1.1431 on Friday. The dollar recovered from an early dip on the yen to stand at 112.59 and it was little changed against a basket of currencies at 95.676 .
Sterling idled at $1.3067 as the market waited for more developments on Brexit.
Prime Minister Theresa May will tell parliament on Monday that 95 percent of Britain's divorce deal has now been settled but will repeat her opposition to the European Union's proposal for the land border with Northern Ireland.
In commodity markets, gold held steady at $1,227.33 an ounce .
Oil prices were stable on Monday, supported by supply concerns ahead of the start of U.S. sanctions against Iran's crude exports, but held back by rising drilling activity in the United States.
Brent crude added 23 cents to $60.01 a barrel, while U.S. crude rose 26 cents to $69.38.
