The U.S. dollar wallowed at one-month lows against a basket of major currencies early on Monday with the Federal Reserve seen almost certain to stand pat at this week's policy review.

Dollar bulls are hoping the central bank will signal an intention to hike more than once this year. Conversely, any hint that the tightening cycle could be drawn out will likely result in a further fall in the dollar, traders said.

"The FOMC statement and members' fed funds rate forecasts will be closely scrutinized. We see risk of USD weakness if the 2017-18 'dots' were to be moved lower," analysts at Barclays wrote in a note to clients, referring to Fed monetary committee participants' "dot plots" of their interest rate expectations.

The dollar index .DXY was a touch softer at 96.108, nursing last week's 1.2 percent drop.

The euro stood at $1.1172 EUR= not far from a one-month high of $1.1218 set on Thursday. Sterling was also just shy of a one-month high of $1.4437 GBP=D4 set on Friday.

The Canadian dollar remained near a four-month high of C$1.3168 per USD CAD=D4, while the Australian dollar AUD=D4 stood near an eight-month high of $0.7583.

Ahead of the Fed's March 15-16 meeting, the major currencies were pretty much in consolidation mode, taking stock of last week's choppy action.

There was much confusion when the European Central Bank delivered bold easing measures on Thursday, only to later suggest that further cuts in interest rates might be limited.

Traders said there was a slight change of heart on Friday when the market appeared to show some signs of appreciating the extent of the ECB's latest action.

But tempering bullish sentiment slightly was mixed data from China on Saturday, which showed weakness in factory activity but a pick up in real estate investment.

There is little in the way of market-moving data out of Asia on Monday, leaving the focus on the Fed, the Bank of Japan and Bank of England.

Both the BOJ and BOE are expected to stay on hold at their meetings this week.