NEW YORK, Oct 23 Reuters The U.S. dollar edged lower against a basket of currencies on Monday as U.S. Treasuries erased earlier losses, with 10year U.S. Treasury yields retreating after briefly breaching the 5 level.

Moves in the foreign exchange market were largely muted on Monday as traders awaited several events this week, including a European Central Bank meeting, and the release of U.S. GDP data and the Federal Reserve39;s preferred inflation gauge.

A big week of data with eyes on U.S. GDP on Thursday, plus BoC Bank of Canada and ECB European Central Bank in the mix, and of course geopolitical risk remaining incredibly elevated is really denting traders39; desire to do much as the week gets underway, said Michael Brown, market analyst at Trader X, in London.

But the main news on Monday was the yield on 10year U.S. Treasuries reaching as high as 5.021, the latest stage of a relentless selloff in government bond markets, driven by investors accepting central banks will keep rates persistently high, particularly in the United States, an increase in supply of bonds and widening term premia.

The 10year yield was last at 4.905.

Besides that, the risk of Israel39;s war on the Islamist group Hamas becoming a wider regional conflict is keeping markets on edge, as Israeli air strikes battered Gaza early on Monday, and the United States dispatched more military assets to the region.

The dollar index , which measures the currency39;s strength against a basket of six…