Dollar holds near two-month high as yields rise, Fed data awaited

The dollar hovered near a two-month high on Tuesday, supported by volatile oil prices and rising Treasury yields, as traders awaited U.S. economic data for clues on the Federal Reserve's rate path. The euro traded near a three-month low at $1.1367 after the European Central Bank signalled measured inflation steps, while sterling held steady at $1.3248. The dollar index rose to 101.2, on track for its best monthly gain since June. Treasury yields hit multi-year peaks, with the 10-year at its highest since 2007. Markets see a 70% chance of a Fed rate hike in October, up from 57% a week ago. Upcoming U.S. data, including the PCE price index and nonfarm payrolls, are expected to support further hikes. The yen weakened to 157.40 per dollar, with intervention risk looming.