GLOBAL MARKETS-Wall St on hold before U.S. rate decision; oil at 3-month lows

(Updates with close of U.S. markets)

* Dollar steady after Friday slide as probable Fed hike looms

* Crude oil little changed in choppy trading

* More M&A: Intel (Euronext: INCO.NX - news) buying Mobileye (EUREX: MOEF.EX - news) , Wood Group for Amec Foster

* Mining stocks help underpin European benchmarks

By Lewis Krauskopf

NEW YORK, March 13 (Reuters) - Major U.S. stock indexes paused on Monday as investors braced for a potential U.S. interest rate hike by the Federal Reserve later in the week, while oil prices hovered near three-month lows.

The dollar steadied against a basket of currencies after touching a two-week low.

Friday's strong U.S. employment report solidified a view among Wall Street's top banks that the Federal Reserve will boost interest rates when its policymakers meet this week.

With (Other OTC: WWTH - news) a rate hike widely expected, market watchers will be looking for signals about the pace of future increases.

"Other than the Fed on Wednesday, I don’t see anything going on to make any decisions on," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

The Dow Jones Industrial Average fell 21.5 points, or 0.1 percent, to 20,881.48, the S&P 500 gained 0.87 points, or 0.04 percent, to 2,373.47 and the Nasdaq Composite added 14.06 points, or 0.24 percent, to 5,875.78.

Corporate deal-making continued as chips giant Intel said it would acquire driverless technology firm Mobileye for $15.3 billion. Mobileye shares jumped 28 percent.

In Europe, Amec Foster Wheeler (Other OTC: AMCBF - news) rallied 11.6 percent after oil services company Wood Group agreed to buy the company for $2.7 billion.

The pan-European STOXX 600 index gained 0.4 percent, led by increases in mining shares.

MSCI (Frankfurt: 3HM.F - news) 's all-country world stock index rose 0.3 percent.

Aside from the Fed meeting, which starts on Tuesday, the world's most powerful finance ministers and central bankers convene in the German town of Baden Baden starting on Friday, their first meeting since Donald Trump won the U.S. election.

Oil hovered around three-month lows as rising inventories and drilling activity in the United States offset optimism over OPEC's efforts to restrict crude output and reduce a global glut.

U.S. crude settled down 0.2 percent at $48.40 a barrel, and touched its lowest point since Nov 30. Brent crude settled down 0.04 percent at $51.35 a barrel.

The dollar edged up 0.1 percent against a basket of key world currencies, recovering after Friday's bout of profit-taking following the robust U.S. jobs report.

"We remain bullish on the dollar, but as Friday's events suggested, a lot of good news is already priced into the dollar at current levels," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

Sterling, which has been one of the worst performers against the dollar the last two weeks, rose half a percent after Scotland demanded the right to hold a new referendum on independence.

U.S. Treasury yields edged higher in anticipation of an interest rate increase on Wednesday, nervousness that the central bank could indicate a more aggressive pace of future rate hikes, and new corporate bond supply.

Prices for benchmark 10-year Treasuries fell 9/32 to yield 2.615 percent, from a yield of 2.582 percent late on Friday.

The prospect of imminent interest rate rises kept spot gold near five-week lows touched last week. (Additional reporting by Rodrigo Campos, Sam Forgione and Gertrude Chavez-Dreyfuss in New York; Editing by Bernadette Baum and Nick Zieminski)