Dollar Steadies Amid Treasury Yield Rebound, G10 Currencies Fall

The US Dollar Index (DXY) steadied on Tuesday after a weak start to the week, supported by a rebound in US Treasury yields and ongoing geopolitical tensions.

Treasury yields climbed back toward 4.2%, prompting derivative traders to consider buying near-the-money USD call options to capitalize on this momentum.

In G10 currency markets, EUR/USD slipped below 1.1600 despite expectations of an ECB rate hike in September, while GBP/USD fell back to the low 1.3500s ahead of the UK's final S&P Global Services PMI reading.

WTI crude oil added to gains near $90.00 a barrel, driven by supply-side pressures and geopolitical uncertainty, prompting traders to implement bullish call spreads.