The dollar strengthened and US Treasury yields hit a two-week high on Monday on expectations the Federal Reserve will give a signal this week that it is gearing up to raise interest rates.

An upbeat assessment of the US economy’s strength from Fed Vice Chairman Stanley Fischer on Sunday was seen raising the prospect of Fed chair Janet Yellen flagging up a rate rise at a meeting with the world’s central bankers on Friday.

The dollar index, which tracks the greenback against a basket of six major currencies, rose 0.4 per’cent to 94.872 , pulling away from a six-week low hit last week after minutes of the Fed’s last policy meeting showed rate-setters split on when to hike.

US 10-year Treasury yields touched a two-week high of 1.60 per cent on Monday while shorter-dated yields touched levels not seen since Britain's shock vote to leave the European Union in June.

World stocks fell 0.13 per cent early on Monday but were flat at 0820 GMT after a bounce-back in Europe, led up by Syngenta after its proposed takeover by ChemChina was approved by US regulators.

“The market took his (Fischer's) remarks to mean that the Fed’s Yellen might blow the same trumpet in her upcoming Jackson Hole remarks,” analysts at RBC Capital Markets said in a note.

Global central bankers will join the annual mountain retreat that in Jackson Hole, Wyoming on Thursday, with Yellen due to speak the following day.

Emerging stocks and currencies fell broadly on Monday. Many emerging countries borrow heavily in US dollars meaning an appreciation in the greenback makes it more expensive for them to service their debt.

Interest rate futures contracts indicate that the market is pricing in about 50/50 odds of a US rate increase by the end of the year.

Oil prices fell on Monday as analysts said they doubted upcoming producer talks would rein in oversupply.

Soaring exports of refined products from China also pressured prices, as this was seen as the latest indicator of an ongoing global fuel glut, traders said.

Brent crude futures were trading at $49.94 per barrel at 0712 GMT, down 95 cents, or 1.87 per cent.

Crude futures have risen almost $10 a barrel since early August on speculation that Saudi Arabia and other members of the OPEC will agree next month to a production freeze deal with non-OPEC producers led by Russia.

US crude fell 1.57 per cent to $47.75 after gaining 9 per cent last week, rising for a second straight week.

Gold fell on Monday to its lowest in more than a week as the dollar strengthened. Spot gold was down 0.6 per cent at $1,333.01 an ounce.

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