The U.S. dollar declined against its major counterparts in the Asian session on Monday, with investors cautious ahead of the Federal Reserve meeting that would provide indications of the pace of future rate hikes in the coming months.

The Fed beings its 2-day monetary policy meeting tomorrow, with a decision due on Wednesday.

The Fed is widely forecast to raise rates by a quarter point to a range between 1 percent and 1.25 percent. The central bank last raised rates in March by 25 basis points.

Investors await the Fed's interest rate projections for course of possible interest rate hikes over the rest of the year. Market participants are anxious to see whether the Fed would sound more dovish in the light of weak data.

Other key events this week include decisions from the Bank of England and the Bank of Japan, although no changes are expected.

Investors digested news of a surprise hung parliament result in the UK which put the nation into a period of political uncertainty and likely delay the Brexit talks. British Prime Minister Theresa May said she will seek to form a government with support from Northern Ireland's Democratic Unionist Party.

The greenback was higher against its major rivals on Friday, amid increased expectations for a Fed rate hike at its meeting this week. The currency rose 0.3 percent against the yen, 1.6 percent against the pound and 0.2 percent each against the franc and the euro for the day.

The greenback fell to 1.1217 against the euro and 1.2769 against the pound, from last week's closing quotes of 1.1195 and 1.2741, respectively. The next possible support for the greenback is seen around 1.13 against the euro and 1.30 against the pound.

Against the Swiss franc and the yen, the greenback dropped to 0.9678 and 110.16 from Friday's closing quotes of 0.9689 and 110.32, respectively. On the downside, 0.95 and 108.00 are likely seen as the next support levels for the greenback against the franc and the yen, respectively.

Looking ahead,at 4:30 am ET, Reserve Bank of Australia Assistant Governor Guy Debelle is expected to speak at the Global FX Code of Conduct Launch in Hong Kong, via Satellite.

At 1:35 pm ET, Bank of Canada Senior Deputy Governor Carolyn Wilkins is expected to speak about diversity in the Canadian economy before the Associates of the Asper School of Business, in Winnipeg.

U.S. Federal Reserve's monthly budget statement for May is due to be released at 2:00 pm ET.

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