Oil prices eased, with Brent crude futures down more than 1 percent at around US$115 a barrel after hitting a six-month high last week, following a Reuters report that Qatari mediators were in Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the US.

Meanwhile, US Treasuries largely held onto gains from a recent safe-haven rally, as elevated oil prices kept inflation worries alive and a tech-led selloff over concerns about AI spurred a rotation out of risk assets.

Yields on US 10-year notes were last down to 4.974 percent while those on 30-year notes were at 5.299 percent, hovering near one-month lows.

"For the time being, it seems to point to the US bond market being in the driving seat for broader dollar performance," said Ray Attrill, head of FX strategy at National Australia Bank.

"I think the market is sort of responding to the fall we've seen in Treasury yields and the fact that yield differentials between the US and other kind of G10 majors are compressing. I think that's taken a little bit of the heat out of the US dollar."

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The euro rose 0.16 percent against the greenback to $1.122, aided by relief that France was spared a Moody's downgrade despite social unrest. Sterling strengthened 0.1 percent to $1.3385.

The dollar index, which measures the US currency against a basket of peers, was a shade weaker at 101.64.

The Australian dollar fetched $0.7030, down 0.04 percent, while the kiwi traded 0.06 percent stronger at $0.572.

The Japanese yen was largely steady and was last at 156.920 per dollar.

Central bank decisions in focus

Five major central banks will take center stage later in the week, with the US Federal Reserve, the European Central Bank and the Bank of Japan expected to hold rates steady. Markets are pricing in potential hikes from the Bank of Canada and the Reserve Bank of New Zealand.

"Forward guidance could matter more than the decisions themselves," said Chris Weston, head of research at Pepperstone, in a note.

"The decisions themselves may be largely discounted. The real issue that could move the dial in short-term rates and by extension is how policymakers shape expectations for subsequent meetings and whether markets need to reprice the forward rates curve."

Meanwhile, a packed US economic calendar will include an October consumer confidence report, a PCE price index, and jobless claims, which could provide additional clues on the outlook for Fed policy.

Elsewhere, gold was slightly lower; spot gold traded at $3,986.16 per ounce.

In cryptocurrencies, bitcoin was down 0.6 percent at $79,925.84, while ether was 1.1 percent lower at $2,317.33.

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