The pan-continental Stoxx Europe 600 fell 0.1% in opening trade.
"The Fed is listening to the market and has acknowledged flashing market signs", said Sim Moh Siong, currency strategist at Bank of Singapore.
Yields on two-year Treasuries rose to 2.49 percent, from a trough of 2.37 percent, but were still below those on one-year paper.More news: Flu season surging and likely not at peak in Canada, doctors say
Last week, amid intense pressure from U.S. policymakers including the United States president Donald Trump, the USA central had to step away from its much-debated monetary policy and interest rate hike, despite the inflation target had been closer to central bank's target (1.90 percent while the target was 2 percent). This, along with a 100 basis point cut in China's bank reserve requirement ratios and comments from Fed Chair Jerome Powell that the US central bank would be flexible in its approach in 2019, has been the main driver for the recovery.
However, few analysts still see scope for the Fed to raise rated in 2019. Trump has repeatedly complained about the Fed's rate hikes and sought to pin blame for stocks' decline on the Fed and Chairman Jerome Powell, whom Trump has discussed firing, Bloomberg reported last month.
Wee said he still expects the Fed to hike rates twice this year. The dollar index, a gauge of its value versus six major peers, stood at 96.12 early on Monday, down 0.07 percent. The move frees up $116 billion for new lending as it tries to reduce the risk of a pronounced fall in the pace of economic growth.
The strong climbs in Asia followed a stock surge on Wall Street Friday, after better-than-expected US nonfarm payroll figures suggested a healthy labor market and eased investors' concerns about the potential for a USA economic slowdown.More news: Malta allows 49 migrants stranded off coast since December to disembark
A further step by China's central bank late Friday to secure liquidity to the slowing economy may also help assuage concerns. Ray Attrill, head of currency strategy at National Australia Bank, thinks it may be reasonable to expect as many as four 100 bps cuts this year.
USA gold futures were also steady at $1,289.50 per ounce.
The two sides have until March 1 to make a deal, after which Trump has pledged to ramp up tariffs to 25 percent, from 10 percent, on $200 billion worth of Chinese imports.
The effect was apparent in the Australian dollar, which is often used as a liquid proxy for emerging markets and China risk.More news: SpaceX’s Crew Dragon capsule perched on pad ahead of first orbital flight
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