The dollar eased Monday ahead of the FOMC rate decision on Wednesday.
The GBP steadied as U.K. PM Theresa May’s Conservatives sought to form a coalition government after losing their majority in Thursday’s election.
The dollar index was off 0.13% at 97.11 at 03:00 ET with the FOMC expected to raise rates Wednesday for the second time this year.
The market odds of a June rate hike currently stand at 91.8%.
Sterling was off 0.02% at $1.2744 after its biggest fall in eight months after the surprise outcome of the U.K. election.
The Conservatives are in talks with the Democratic Unionist Party of Northern Ireland on a possible alliance.
May’s political future is still under question after the Tories’ election setback.
The euro was firm above $1.12 after the ECB last week lowered its inflation forecasts and tweaked its forward guidance.
French President Emmanuel Macron’s party is on track for a comfortable majority in the National Assembly.
Macron’s La République en Marche won 32% of the vote in the first round of the parliamentary elections.
The dollar was off 0.14% at 110.19 yen on some safe-haven buying of the Japanese unit. Japanese data released Monday were mixed, with the PPI flat.