EUR/USD rose 0.33% to 1.0833.
The euro remained under pressure after European Central Bank President Mario Draghi indicated Thursday that the bank could roll out fresh stimulus measures as soon as its next meeting in March.
Earlier Monday, data showed that German business climate weakened slightly this month.
The Ifo German business climate index ticked down to 107.3 from December’s 108.6, compared to expectations for a reading of 108.4.
USD/JPY fell 0.23% to 118.50, off Friday’s two-week highs of 118.87, but still above the one-year trough hit last Wednesday.
The Fed is expected to keep interest rate on hold at the conclusion of its latest meeting on Wednesday after raising interest rates for the first time in almost a decade in December.
Investors are looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
Meanwhile, the yen’s gains were limited after Bank of Japan Governor Haruhiko Kuroda said on Friday that the central bank has room to provide additional stimulus if necessary.
The BoJ is to conclude its two day policy meeting on Friday and most analysts are expecting no changes to monetary policy, but recent weakness in economic reports has fueled expectations for more easing later this year.
Separately, data on Monday showed that Japanese exports fell 8% in December from a year earlier. It was the third successive monthly decline as the slowdown in China weighed.
Elsewhere, the dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.4272 and with USD/CHF at 1.0153.
Meanwhile, the Canadian dollar remained under pressure as oil prices resumed their decline on Monday amid ongoing concerns over a global supply glut and slowing global demand. USD/CAD was up 0.66% at 1.4209.
The Australian and New Zealand dollars was weaker, with AUD/USD down 0.36% at 0.6980 and with NZD/USD shedding 0.22% to 0.6479.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.20% at 99.39, still close to Thursday’s more than one-month highs of 99.79.
