The euro slipped against the dollar on Monday while global stocks dipped as hopes of swift action from policymakers to boost the euro zone's rescue fund faded ahead of a meeting of finance ministers.

A debate on increasing the effective lending capacity of the European Financial Stability Facility is expected to dominate the meeting, but concerns about whether officials can reach agreement weighed on market sentiment.

The euro extended falls as European Central Bank policymaker Athanasios Orphanides was quoted saying the market may have overreacted to the ECB's statement last week. The bank's warning on inflation had prompted investors to bring forward bets on the timing of a first rise in euro zone interest rates, sending the euro to a one-month high.

Expectations for tighter ECB monetary policy measures aren't going to go away. But higher rates and a cobbled together rescue package for the euro zone aren't positive for the euro in the long run, said Ian Stannard, senior currency strategist at BNP Paribas.

The euro lost 0.4 percent on the day against the dollar at $1.3316, having rallied some 4 percent last week to a high of $1.3458 on Friday. Against a basket of currencies, the dollar <.DXY> was up 0.1 percent at 79.249.

Ministers will discuss an increase in the fund, but there was a growing realization that a deal was not imminent, with France saying it would be March before a firm plan was in place.

It's becoming increasingly apparent that Germany doesn't want an increase in the rescue fund and that's weighing on euro sentiment today because there were positive expectations building last week, said Manuel Oliveri, currency strategist at UBS in Zurich.

Some analysts pointed to a February 4 European Council meeting as a more likely stage for such decisions to be made, though this week's meeting should give investors a sense of how much agreement there is among euro zone members to enlarging the facility.

German Bund futures were 6 ticks higher at 124.96. They cut earlier losses while bonds of the euro zone's peripheral issuers sold off after Spain announced a syndicated bond sale with a target size of 4-5 billion euros.

GLOBAL STOCKS, COMMODITIES WEAK The MSCI world equity index <.MIWD00000PUS> was down 0.1 percent at 337.13, off a 28-month high of 337.68 touched overnight as last week's rally petered out.

With U.S. markets closed on Monday, the focus was on events in Europe, with news that Spain was opting for a syndicated sale of its debt instead of an open auction driving its bond yields back up after a recovery in recent sessions.

European shares <.FTEU3>, however, edged up 0.1 percent, lifted by gains in oil shares and a surge in British engineering firm Smiths Group after it rejected a bid for its medical services unit, which offset falls in mining stocks.

Oil stocks were led higher by BP following the share swap and arctic exploration deal that the London-based oil major signed with Russia's Rosneft late on Friday.

Commodity prices were broadly lower on a firmer dollar and ahead of the euro zone meeting.

U.S. crude oil was down 30 cents at $91.24 a barrel, while ICE Brent for March lost 37 cents to $98.01, staying not far below $100, a level not seen since the beginning of October 2008.

The oil price has been in an uptrend since the middle of November and now we are getting close to $100. The weather in the northern hemisphere has turned a bit milder, and the end of winter is in sight. It's either pausing or going to retrace, said Christopher Bellew at broker Bache Commodities.

Copper prices were lower, though gold prices held steady around $1,359.80 an ounce, underpinned by physical buying ahead of the Chinese new year.

(Additional reporting by Neal Armstrong and Claire Milhench; editing by Patrick Graham)