Japan's yen weakened briefly on Monday to the 150-per-dollar level, as elevated U.S. Treasury yields kept the dollar supported across the board but without pushing it too much higher.
Investors are waiting for several events this week, including the European Central Bank meeting, and the release of U.S. GDP data and the Federal Reserve's preferred inflation gauge.
Besides that, the risk of Israel's war on the Islamist group Hamas becoming a wider regional conflict is keeping markets on edge, as Israeli air strikes battered Gaza early on Monday, and the United States dispatched more military assets to the region.
U.S. Treasuries are also at the forefront of investors' minds, with 10-year yields around 4.982%, having briefly popped above 5% last week after Federal Reserve Chair Jerome Powell said the U.S. economy's strength and hot labour markets might warrant tighter financial conditions.
The dollar index firmed a fraction to 106.23, with the euro down 0.1% at $1.0586, and sterling flat at $1.21620.
Even though it hasn't risen lockstep with yields, the dollar has been underpinned by the steady rise in yields at the long end of the U.S. Treasuries curve, driven by widening term premiums on expectations of stronger growth and fiscal slippage.
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