Widening interest rate differentials between the United States and the rest of the world, driven by a confident US Federal Reserve, has fuelled an unlikely dollar rally this year. But weak data in recent weeks has clouded the currency's prospects for next year.

US non-farm payrolls increased by 155,000 jobs last month, below a median forecast of 200,000 jobs, and the wage increase was weaker than expected, even though its annual rise remained near the highest level in almost a decade.

Apart from weak data, some Fed policymakers have struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy and lowering the expectations of US rate hikes priced into money markets.

Futures markets are now pricing in only a 44 percent chance of a US rate increase next year compared with nearly 80 percent last Monday as the US bond yield curve has flattened.

"Fed fund expectations are dropping like a stone and that is a big obstacle for the dollar, though there is plenty of event risk out there this week that will give plenty of thought for dollar bears," said Ulrich Leuchtmann, an FX strategist at Commerzbank in Frankfurt.

Against a basket of currencies, the dollar was flat after falling 0.8 percent last week, its biggest weekly drop since late August.

The euro led gains, rising 0.34 percent at $1.1470 though market traders said currency markets will be in a wait-and-watch mode.

French President Emmanuel Macron will address the country at 2000 Paris time (1900 GMT) on Monday as he seeks to "yellow vest" anti-government protesters that have wreaked havoc in Paris during the weekend.

In London, Theresa May faces an internal revolt against her Brexit deal before a vote in the parliament on Tuesday. May plans to push ahead with the vote, but senior lawmakers in her own party put pressure on her to go back to Brussels and seek a better offer.

A rejection could throw plans for Britain's exit into turmoil and leave her own political future hanging in the balance. Against the dollar, the British pound was flat at $1.2720.