The US dollar fell in European trade on Monday against a basket of major rivals away from three-month highs on active profit-taking.

The losses are curbed by a surge in US 10-year treasury yields, following a spate of important US data, which could provide clues on the future of US interest rates this year.

The Index

The dollar index fell 0.15% today to 104.18, with the highest since July 30 at 104.57.

The index rose 0.3% on Friday, the fourth profit in five days.

Across last week, the index rose 0.8%, marking the fourth weekly profit in a row.

US Yields

US 10-year treasury yields rose 1.2% on Monday, widening gains for a second session, and hitting three-month highs at 4.292%, in turn pressuring non-yielding assets.

The developments come amid increasing bets that the Federal Reserve will likely take a calmer pace in its policy easing program.

US Rates

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 95%, while the odds of no changes in interest rates stood at 5%.

Now investors await a batch of US labor data, including job opportunities, private sector employment, and unemployment claims data, in addition to the all-important US payrolls report on Friday.

Investors also await US personal consumption data for September on Friday, which the Fed relies upon heavily to gauge inflation.

US Elections

As the US prepares for the presidential election on November 5, a state of uncertainty spreads in the markets, with recent polls indicating a close race between Donald Trump and Kamala Harris.