Meanwhile, Brent crude futures LCOc1 were up 1.4% at $101.67 a barrel after dropping over 3% the day before, when they briefly fell below $100 for the first time in two weeks on the back of the possibility that Trump might meet Iranian President Masoud Pezeshkian to attend the UN General Assembly this week.
That said, oil futures are still up about 12% this month, and the physical market is showing that stress is creeping in. Prices for immediate delivery of some types of crude in northwest Europe, for example, are above $130, up nearly 50% so far in September.
With energy prices showing no meaningful retreat, investors are pricing in another round of rate hikes from major central banks, which helped underpin the dollar, but pushed up global bond yields.
The dollar rose the most against the yen JPY=, up 0.26% at 157.7, hovering near a three-week high, as support faded for the Japanese currency from the expectation for quicker rate hikes from the Bank of Japan.
The BOJ raised rates last week to a 31-year high but two dissenting votes and lack of explicit hawkish guidance disappointed investors, leaving the yen vulnerable and stoking intervention jitters.
"FX intervention remains a blunt tool to prop up currencies, and without a forceful monetary policy response it will be difficult for Japanese authorities to rein in the selloff in the yen," said Matthew Ryan, head of market strategy at Ebury.
The Federal Reserve, by contrast, raised rates last week and warned its fight against inflation was not over, keeping the door open to further tightening.
The dollar index =USD, which tracks the US currency against six others, was near seven-week highs, as US 10-year Treasury yields US10YT=RR edged up to 4.969%, not far off October 2023's 16-year high.
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