The euro slipped against a mixed dollar on Monday as higher Treasury yields driven by inflation and debt-supply concerns weighed on risk sentiment, while ECB President Christine Lagarde downplayed euro zone inflation concerns.

Fed Governor Lisa Cook said AI-driven demand and higher oil prices are likely to keep inflation pressures elevated in coming months, though she did not signal a need for further rate hikes.

Separately, Treasury Secretary Scott Bessent appointed David Zervos as counselor.

Oil trimmed early gains as US and Iranian officials hold separate talks, with a U.S. official saying discussions remain constructive but no deal is likely without nuclear progress, despite President Donald Trump's openness to sanctions relief.

Lagarde said euro zone inflation has yet to trigger significant second-round effects, supporting a measured ECB response, while the central bank plans to expand euro liquidity backstops to bolster the currency's global role.

ECB Governing Council member Alvaro Santos Pereira said energy remains the main inflation driver, with higher natural gas prices posing a key risk this winter.

UK finance minister John Healey said fiscal discipline will be central to his Oct. 28 budget, citing rising debt-servicing costs as a drain on public spending.

BoE Deputy Governor Dave Ramsden said persistent inflation has strengthened the case for keeping rates higher for longer.

DXY rose in active month-end trading, though gains were tempered as bullish dollar option sentiment eased.

EUR/USD hit a two-month low at 1.1353 before recovering, but bearish momentum below key moving averages keeps risks tilted toward 1.1350, with resistance near 1.1400.

EUR/CHF rose for a third day following weekend comments by Swiss National Bank Chairman Martin Schlegel on inflation and the Swiss franc.

GBP/USD edged higher in choppy trade, but the broader downtrend remains intact with risks still skewed toward 1.3200 support and the YTD low at 1.3140, while resistance lies at 1.3280.

USD/JPY held around 157.20, supported by firmer Treasury yields and month-end demand, but intervention risks and softer momentum may cap gains near 158.00 and leave support at 156.45-65 vulnerable.

AUD/USD gained amid a stronger CNH ahead of month-end and Golden Week, but bearish technicals and resistance just above its 200-day moving average at 0.7025 leave risks remain skewed lower.

Treasury yields rose about 6 basis points, with the 2s-10s curve nudging up to +31.6bp.

The S&P 500 fell 0.59%.

WTI oil was up only 0.22% after being up over 2%.

Gold slid 3.6% while copper fell 1.9%.

Heading toward the close: EUR/USD -0.20%, USD/JPY +0.11%, GBP/USD +0.09%, AUD/USD +0.01%, DXY +0.23%, EUR/JPY -0.09%, GBP/JPY +0.14%, AUD/JPY +0.08%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)