Oil prices rose briefly above $68 a barrel on Monday as investors fretted about upcoming talks on Iran's nuclear plans while the dollar rose and bonds clung to recent losses as Tuesday's U.S. rate decision loomed into view. European shares were mostly weaker although the Nikkei average closed at a 5-1/2 year high as evidence grew of a strengthening Japanese economy. Bid fever stoked steel stocks and oil's rise lifted energy shares in Europe but dragged on other sectors. The dollar hit a four-week high of 117.81 yen and kept the euro penned in below $1.22 as traders awaited a Federal Reserve policy meeting to see how much more the U.S. currency's interest rate advantage will widen. An increase in the fed funds rate to 4.50 percent from 4.25 percent is widely forecast but is also seen by many economists as probably the last predictable hike, with Ben Bernanke set to take over as Fed chairman on Feb 1. Inflation data at 1330 GMT -- the Fed-tracked core personal consumption expenditures index, which is seen rising 0.2 percent in December after a 0.1 percent rise in November -- could give investors key clues on the Fed's next moves. "The PCE deflator will be extremely important today," said Ian Stannard, senior currency strategist at BNP Paribas. "If it's strong the market will not only be looking for a rate hike at this meeting but next time around as well."