The euro rose against a broadly weaker dollar on Monday, supported by short-covering after Friday's outsized decline, month-end flows, softness in U.S. equities, and expectations that the European Central Bank will raise interest rates next week.

Treasury Secretary Scott Bessent believes the Japanese government and BOJ will take steps to strengthen the yen and hinted at information not yet reflected in markets.

Bessent also said he will meet Canada's finance minister at the G20 and said he had a "very robust" meeting with China's central bank governor, Pan Gongsheng.

Federal Reserve Chairman Kevin Warsh said a global investment surge is replacing the savings glut, supporting growth and capital spending.

Vice President JD Vance said Trump's social media post on Kharg Island was intended as a message to Iran, after President Donald Trump vowed further strikes.

German inflation accelerated less than expected in August to 2.9% year-on-year, preliminary data from the federal statistics office showed on Monday.

DXY is pulling back after Friday's dollar surge stalled at the 100-DMA near 99.70, with reversal signals suggesting fading momentum but little conviction toward either a bullish or bearish directional bias.

EUR/USD firmed on month-end dollar selling and short-covering, but lower highs, large 1.16-1.7 expiries this week and resistance at the 200-DMA of 1.1633 keep the outlook cautious, unless it clears the 1.1710-11 August double top.

GBP/USD held a modest gain above its 21-DMA of 1.3540, despite rising U.S. yields, with a break above the day's high of 1.3565 potentially targeting 1.36 ahead of the key U.S. payrolls on Friday.

AUD/USD edged up as stronger commodity prices and expectations for further RBA tightening offset rising U.S. yields, with a break above 0.7170 strengthening a bullish case.

USD/JPY remained capped below 160 as softer dollar sentiment and intervention concerns offset support from higher Treasury yields and oil, though the bias stays constructive above 159.

Treasury yields rose as much as 4 basis points as the curve steepened. The 2s-10s curve was up about 3 basis points to +40.2bp.

The S&P 500 fell 0.45%.

WTI oil rose 2.8% amid rising US-Iran tensions.

Gold fell 0.5% while copper gained 0.2%.

Heading toward the close: EUR/USD +0.28%, USD/JPY -0.13%, GBP/USD +0.06%, AUD/USD +0.10%, DXY -0.28%, EUR/JPY +0.10%, GBP/JPY -0.09%, AUD/JPY -0.14%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)