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·       The dollar was holding below three-and-a-half highs against a basket of the other major currencies on Monday as U.S. Treasury yields pulled back after climbing above the 3% level for the first time in four years last week.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.16% to 91.45 by 03:53 AM ET (07:53 AM GMT), holding below Friday’s highs of 91.79, the most since January11.

The index climbed 1.37% last week, boosted by rising U.S. yields and the prospect of a faster pace of rate hikes by the Federal Reserve this year.

The yield subsequently backed off that level and was last at 2.961%.

The dollar pushed higher against the yen, with USD/JPY adding on 0.18% to trade at 109.25, within reach of the two-and-a-half month high of 109.52 set on Friday.

The euro was lower, with EUR/USD slipping 0.14% to 1.2113, holding above Friday’s three-and-a-half month lows of 1.2054.

·       Wednesday is FOMC rate decision day, with a 93.3% expectation (per CME FedWatch) of a hold. Attention will therefore turn to the dot-plot and Chair Powell’s remarks. Expect USD positioning throughout the day.

·       German monthly retail sales unexpectedly fell in March, data showed on Monday, marking a fourth consecutive drop and dampening cheer around a consumer-led upswing in Europe’s biggest economy.

The volatile indicator, which is often subject to revision, showed retail sales decreased by 0.6 percent on the month in real terms, the Federal Statistics Office said.

That confounded the Reuters consensus forecast for a 0.8 percent rise and followed an upwardly revised drop of 0.2 percent in February.

The retail sales data came after a GfK survey published last week showed the mood among German consumers fell heading into May amid fears that a possible confrontation between the West and Russia in Syria and protectionist U.S. trade policies could hurt the economy.

·       North Korean leader Kim Jong Un plans to invite experts and journalists from the United States and South Korea when the country shuts its nuclear test site in May, Seoul officials said, as U.S. President Trump pressed for total denuclearisation ahead of his own unprecedented meeting with Kim.

·       Iran said on Monday cooperation between Saudi Arabia and the United States will further destabilize the Middle East, a senior official said, adding that Tehran will continue its presence in the region despite Washington’s pressure to limit its influence.

Secretary of State Mike Pompeo, who met Saudi King Salman in Riyadh on a flying visit to the region, said on Sunday that the United States was deeply concerned by Iran’s “destabilizing and malign activities” in the Middle East.

·       Activity in China's vast manufacturing sector eased in April, as export orders slowed in another sign of ebbing economic growth, while a simmering Sino-U.S. trade row heightened risks for the industrial sector.

The official Purchasing Managers' Index (PMI) released on Monday fell to 51.4 in April, from 51.5 in March, but remained well above the 50-point mark that separates growth from contraction on a monthly basis. It marked the 21st straight month of expanding business conditions in China.

·       Oil prices dipped on Monday after a rising rig count in the United States pointed to higher production there, but markets held near their highest in over three years and remained set for a second straight month of gains.

Oil prices were supported by supply concerns amid prospects that the United States could reimpose sanctions on Iran, while OPEC-led producers continue to withhold output.

Brent crude futures LCOc1, the international benchmark, had dipped 50 cents, or 0.7 percent, to $74.14 a barrel by 0633 GMT. Prices climbed as high as $75.47 last week, levels not seen since November, 2014.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $67.82 a barrel, down 28 cents, or about 0.4 percent, from their last settlement.