The dollar rose on Monday, supported by higher US two-year Treasury yields ahead of Wednesday's FOMC decision, gains in US technology shares following Anthropic's IPO filing, and weakness in the Brazilian real after President Luiz Inacio Lula da Silva's election victory.
Improving OAT-Bund yield spreads after Moody's left France's credit rating unchanged last week also helped support risk sentiment.
The US central bank is widely expected to leave policy rate unchanged at 3.75% to 4%.
Russian President Vladimir Putin will meet with Iran's Massoud Pezeshkian and Qatar's Sheikh Tamim bin Hamad Al Thani in Moscow. Meanwhile concerns over a potential Hezbollah escalation added to geopolitical risk.
Saudi, Turkish and Pakistani officials met Iranian counterparts in Tehran to ease regional tensions as Yemen's Houthis launched fresh attacks on Saudi Arabia.
British finance minister John Healey will announce plans to increase the minimum wage by nearly 4%, The Times newspaper reported on Monday.
Turnover was uneven ahead of this week's central bank meetings and month-end flows, with the dollar index briefly pushing above its 21-DMA at 101.94 shortly after the US equity open.
EUR/USD retained a softer tone below 1.1200 as higher EU gas prices and limited demand for euros weighed on sentiment, with support at 1.1173 and resistance at 1.1235 ahead of the Fed and ECB decisions.
GBP/USD held above 1.3326 support, underpinned by risk appetite and easing fiscal concerns, but remains capped near 1.3360 as markets await Wednesday's Fed decision.
USD/JPY remained constructive above the lower Bollinger at 156.90 as the dollar and shares advanced though its 55-DMA at 157.71 and 21-DMA at 157.88 may limit gains, keeping the pair centered within its 156.06-158.44 daily cloud.
AUD/USD consolidated below its 100-DMA at 0.7033, with support at 0.7000 as traders await Australia's Q3 CPI, where a strong print could lift the pair toward 0.7100 while a miss risks a return to 0.6900.
Treasury yields were mixed as the curve flattened, with a soft auction pressuring two-year notes. The 2s-10s curve fell about 4 basis points to +27.3bp.
The S&P 500 rose 0.75%.
WTI oil slipped 1.4% though held above $100/bbl
Gold rose 0.47% while copper gained 0.62%
Heading toward the close: EUR/USD -0.17%, USD/JPY +0.36%, GBP/USD -0.14%, AUD/USD -0.13%, DXY +0.13%, EUR/JPY +0.17%, GBP/JPY +0.18%, AUD/JPY +0.17%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)
