Dollar holds gains as traders await US price data after oil jumps

Markets were awaiting the release of U.S. CPI at 8:30 a.m. ET (1230 GMT), one of the last major data points before the Federal Reserve meets next week. The data is likely to show that consumer prices accelerated in August as the cost of gasoline rebounded.

Fed funds futures are pricing a roughly 70% probability of a 25-basis-point hike on September 16, compared with around a 60% chance a week earlier, according to the CME Group's FedWatch tool.

A roiling global bond selloff gathered pace again on Thursday as traders priced in more rate hikes around the world, pushing the benchmark 10-year U.S. Treasury yield US10YT=RR near the closely watched 5% level as investors also worried about high government debt levels.

"The main focus in financial markets at the end of this week is the deepening sell-off in global bond markets, although the spillovers into the FX market have been modest," said Lee Hardman, senior currency analyst at MUFG.