The pound kicked off the week on a positive note, gaining ground against the dollar, while the euro recouped some losses it recorded last week after the European Central Bank's decision to extend its quantitative easing programme.

Having climbed above €1.19 on Friday (9 December), sterling was broadly unchanged against the common currency, trading at €1.1917 and rose 0.45% against the dollar, fetching $1.2626.

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With very little to move the markets in terms of economic data, traders looked ahead at the Federal Reserve meeting on Wednesday, when the US central bank is expected to raise interest rates.

"In the run-up to a priced-in US rate hike on Wednesday, the real focus now is on the Fed's policy normalisation outlook in light of [Donald] Trump's election," said Michael Van Dulken, head of research at Accendo Markets.

Elsewhere, the euro gained 0.45% against the dollar, exchanging hands at $1.0608, while the greenback was on the front foot against the yen, rising 0.17% to ¥115.52. The US currency, however, nursed losses against its other major rivals, sliding 0.55% and 0.07% and against its Canadian and Australian counterparts and losing 0.18% against the Swiss Franc.

However, Kathleen Brooks, research director at City Index suggested the dollar's decline was unlikely to last long. "This seems like typical Monday trading in the FX market: the prevailing trend is taking a backseat," she said.

"Apart from the yen, the dollar is weaker across the board. We doubt this will last, as we still expect the dollar rally to return, we expect sellers to come into euro/dollar around $1.0650, and eventually we could see back to parity at some point in 2017."

Meanwhile, the Russian ruble jumped over 2% after oil producers agreed to cut global output by 1.8m barrels per day. One US dollar now buys just 61.2 ruble, the lowest since October 2015, when fears over Russia's economy sank the currency.

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