The US Dollar Index rose 0.24% to around 101.98 on Monday as investors positioned for rate decisions from five G10 central banks, including a Fed meeting on Wednesday widely expected to hold rates.
A sharp rise in global bond yields earlier in October has hit Asia-focused bank shares and raised concerns about capital buffers ahead of third-quarter earnings from HSBC, Standard Chartered and DBS.
India's benchmark 10-year bond yield fell 1 basis point to 7.4640% as Brent crude dropped 2.14% to $114 a barrel, easing back after touching a six-month high the prior week.
Global stock funds drew net inflows of $28.16 billion in the latest week, up from $19.88 billion previously, as falling US Treasury yields and solid earnings lifted demand for shares.
S&P Global's flash services gauge dipped to 57.9 in October from 59.8, narrowly below the 58.0 estimate, while the manufacturing reading topped expectations at 56.0.
S&P Global's preliminary US October Manufacturing, Services and Composite PMIs are due Friday at 13:45 GMT, with forecasts pointing to a mild slowdown from September's strong readings. The data land days ahead of the Fed's October 28 meeting and could move EUR/USD and the US Dollar.
USD/JPY dropped nearly 0.65% on Thursday to around 157, its lowest since September 30, as fears over AI-related investment hit global equities and lifted demand for the Japanese yen.
The US 10-year Treasury yield fell about 13.5 basis points, dipping under the 5% mark, as investors sought shelter from renewed stress in AI-linked credit and stock markets.
A steep drop in artificial intelligence shares drove investors toward US government debt, sending 2-to-10-year Treasury yields lower by at least 15 basis points in their sharpest single-day decline in over a year.
Bridgewater founder Ray Dalio says the sell-off in US Treasuries is still in its early-to-middle stage, with roughly $32 trillion of marketable debt outstanding and foreign buyers pulling back, a dynamic he argues will keep pushing yields higher.