World stocks slipped on Monday from last week's 14-month high while the dollar hit a five-week peak as investors grew convinced U.S. interest rates could rise soon after the previous session's robust jobs report.

A strong U.S. currency weighed on dollar-priced commodity prices, with gold extending Friday's sharp losses having hit an all-time high last week.

The dollar raced higher against a basket of major currencies, having posted its biggest one-day gain this year on Friday, after data showed on Friday that U.S. employers cut only 11,000 jobs last month, the smallest decline since December 2007.

Following the jobs data, investors are fully pricing in a chance that the Fed might raise interest rates to 50 basis points in August.

The market is pricing in more concrete evidence that the Fed will start normalizing policy, said Geoffrey Yu, currency strategist at UBS.

While the Fed is not in a position to start being hawkish on policy, it may start being less dovish.

MSCI world equity index fell 0.6 percent.

The FTSEurofirst 300 index lost more than 1 percent.

Banks came under pressure in Europe on concerns Britain was still considering some kind of windfall tax on bankers' bonuses.

A UK government source told Reuters on Friday that a tax on banks was one revenue-raising option being considered by finance minister Alistair Darling for his pre-budget report on Wednesday and weekend newspapers were heavy with speculation on what form this could take.

Emerging stocks fell 0.6 percent. Dubai stocks fell 5.9 percent to a 20-week low after the emirate's government said it would not sell any assets to meet the multi-billion dollar obligations of state-owned Dubai World.

Dubai shocked investors late last month by asking a standstill on debt held by its conglomerate Dubai World, triggering some sell-off in world stocks and other risky assets.

U.S. crude oil fell 1 percent to $74.68 a barrel. Gold fell to $1,139.30.

The dollar rose 0.3 percent against a basket of major currencies, while it rose 0.6 percent to a five-week high of $1.4761 per euro.

(Post-data) reaction confirms our view that the current dollar weakness will come to a rapid end once it becomes clear that the Fed will end its zero rate policy, Commerzbank said in a note to clients.

The bund futures rose 22 ticks after Friday's sell-off following Friday's better-than-expected U.S. jobs data.