Dollar Holds Near Two-Month High as Treasury Yields Rise and Fed Data Looms

The US dollar held steady near its two-month high on Tuesday as Treasury yields rose and investors awaited key economic data releases this week.

The dollar index, which measures the currency against a basket of peers, was up at 101.2, putting it on track for a 1.8% gain this month, its best performance since June.

However, traders are cautious due to the upcoming data releases, including the PCE price index on Wednesday and nonfarm payrolls on Friday, which could influence the Federal Reserve's interest rate decisions.

The euro traded near a three-month low at $1.1367 after European Central Bank chief Mario Draghi signaled measured steps to combat inflation.