The dollar in the meantime held steady against the euro and recovered further against the yen in the wake of much weaker-than-expected readings on U.S. durable goods orders in December.
The dollar rose 0.3 percent against the yen at 102.83 yen after hitting a seven-week low last Friday.
The euro dipped 0.07 percent against the greenback at $1.3662, retreating from about 3-1/2-week high set last Friday.
The durable goods data were mitigated by a stronger-than-expected January pickup in U.S. consumer confidence and an in-line growth in U.S. home prices in November.
The surprise December drop in durable goods raised some doubts whether the Fed tapered its third round of quantitative easing too soon.
(Read more: Is the euro headed for an Aussie-style crash?)
"They began tapering not because they saw the economy on a firmer footing but rather because they were concerned with the rapid rise in the Fed's balance sheet with little to show for it in economic strength," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
"The markets, especially emerging markets, are taking the view that tapering is as good as ending or reversing QE," Borthwick said.
As investors await the Fed's next move, they dipped their toes back into stocks and commodity-linked currencies such as the Australian dollar.
Worries over how the Australian economy will hold up in the face of slackening commodity markets and a slowdown in China were eased somewhat by the NAB measure of business conditions, which jumped to its highest in more than 2-1/2 years.
The Aussie dollar rose to $0.8769, pulling away from Friday's low of $0.8660, its lowest level since July 2010.