The US dollar eased slightly in the Asian session, but remained firm around 20-year highs against most major currencies.
The currency king initially posted gains in early trading on Monday before falling back in the European and New York sessions.
Investors are likely to take a wait-and-see approach ahead of the central bank's policy decision early Thursday morning Malaysian time.
As the focus this week is the FOMC, Bank of England (BOE), Japan (BOJ) and Swiss National Bank (SNB) policy meetings on Thursday.
The market now sees an 81% chance of a rate hike of 75 basis points at this meeting and a 19% probability of a 100-point increase by the Federal Reserve (Fed).
Against most major currencies, the dollar index is trading at around 109.53 not far from the 20-year high of 110.79 it hit earlier this month.
Looking at the development of other currencies, the euro traded little changed at around the parity price level of 1,000 against the US dollar while the pound remained gloomy at its lowest level in 37 years ahead of the BOE meeting.
Meanwhile, the yen remained flat as the BOJ was widely expected to keep its policy very loose.
However, the turning point in Japanese policy may be sooner than expected after the central bank recently dropped the word 'temporary' in its description of high inflation.
