The dollar held its ground on Monday but was still near multi-week lows against some of its major peers as traders were on guard ahead of central bank meetings this week, including the Federal Reserve's where it will announce its rates decision.

The U.S. currency was pinned near a one-month low against the British pound and the Aussie in early Asia trade at $1.25805 and $0.6745, respectively, though moves were subdued with most of Australia closed for a holiday.

Policy meetings of the Fed, the European Central Bank (ECB) and the Bank of Japan (BOJ) will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates.

Money markets are leaning towards a pause from the Fed when it announces its interest rate decision on Wednesday, according to the CME FedWatch tool, expectations that sent Wall Street surging to a 13-month high on Friday as risk sentiment improved.

The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last marginally higher at 103.58.

Conversely, a clear majority of economists polled by Reuters expects the ECB to hike its key interest rate by 25 basis points this week and again in July, before pausing for the rest of the year as inflation remains sticky.

The euro slipped 0.02% to $1.0744 in early Asia trade, after having risen 0.4% last week, its first weekly gain in roughly a month.

Elsewhere, the Japanese yen steadied at 139.35 per U.S. dollar.

The BOJ is expected to maintain its ultra-loose monetary policy this week and a forecast for a moderate economic recovery, as robust corporate and household spending cushion the blow from slowing overseas demand, sources told Reuters.

Source : Reuters