SINGAPORE - The dollar inched up from a seven-month low hit after U.S. jobs growth in May missed expectations, while sterling fell after the attacks in London that killed at least seven people and wounded 48, just days before Thursday's national election.
Oil jumped after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar on Monday, accusing the wealthy Gulf Arab state of supporting terrorism.
The coordinated move dramatically escalates a simmering dispute over Qatar's support for the Muslim Brotherhood, the world's oldest Islamist movement, and affects some of the world's biggest oil and gas exporters.
Qatar is the biggest supplier of liquefied natural gas (LNG) and a major seller of condensate - a low-density liquid fuel and refining product derived from natural gas. Geopolitical risks kept Asian stocks subdued on Monday, despite U.S. stocks rising to record highs on Friday.
The dollar index, which tracks the greenback against a basket of six major peers, was up almost 0.1 percent at 96.78 after sinking on Friday to its lowest level since the US presidential election in November.
US nonfarm payrolls increased 138,000 in May, severely undershooting the forecast of 185,000, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.
The number of jobs created in March and April was revised down by 66,000 from earlier reports.
The dollar gained 0.1 percent to 110.58 yen, after losing 0.8 percent on Friday.
The US 10-year Treasury bond yield was at 2.1678 on Monday, having plunged from Thursday's close of 2.217 before the jobs data was released.
"The reaction in the 10-year yield implies that the market sees a third rate hike in 2017 as diminishing although still a very real possibility," James Woods, global investment analyst at Rivkin Securities in Sydney, wrote in a note.
After attackers rammed a van into pedestrians on London Bridge and stabbed revelers in nearby bars on Saturday in the third terrorist attack in Britain in the last three months, Prime Minister Theresa May said Thursday's national election would go ahead.
Police shot dead the three male assailants in London's Borough Market within eight minutes of receiving the first emergency call. They arrested 12 others, and raids are continuing, police said.
May is expected to resume campaigning on Monday for a vote which polls show is much tighter than previously predicted. A close election could throw Britain into political deadlock just days before formal Brexit talks with the European Union are due to begin on June 19.
Sterling fell as much as 0.3 percent before paring the losses to trade down 0.2 percent at $1.2864 on Monday.
"Today and tomorrow, I am guessing that sterling will move in a range ahead of the UK election, as I think no one can accurately forecast the outcome," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.
"Brexit has taught us not to believe polls, and not to take aggressive positions ahead of UK events."
The euro fell 0.1 percent to $1.1271 on Monday, holding on to most of Friday's 0.6 percent gain.
MSCI's broadest index of Asia-Pacific shares outside Japan was slightly lower.
Japan's Nikkei reversed earlier losses to climb 0.1 percent as the yen surrendered some of its gains.
Chinese shares fell 0.5 percent, with news of service-sector activity rising in May at the fastest pace in four months failing to lift sentiment.
Australian shares slid 0.8 percent and South Korea's KOSPI was little changed.
Taiwan shares bucked the trend, hitting their highest level since 2000 for a second straight session.
On Friday, all three major Wall Street indexes hit all-time highs, with gains in technology and industrial stocks more than offsetting the subdued jobs report.
Gold rose to a six-week high on Monday, driven by the weaker dollar. It was last steady at $1,279.90 an ounce.