The U.S. dollar index (DXY) rose by 0.97% on Monday, reaching a 5-week high, driven by surging oil prices that hit an 8.25-month high, bolstering inflation expectations. This shift diminished the likelihood of further Federal Reserve rate cuts. Additionally, the ISM manufacturing index for February improved to 52.4, surpassing expectations of 51.5.
In Europe, the euro fell 1.08% to a 5-week low as German retail sales declined by 0.9% month-over-month, marking the largest drop in 19 months. Over in Japan, the yen weakened against the dollar, dropping to a 3-week low, influenced by a rise in crude oil prices. Japan’s manufacturing PMI for February was revised up to 53.0, indicating strong expansion.
Gold prices increased by 1.21% to a 1-month high amid safe-haven demand triggered by geopolitical tensions. Conversely, silver prices fell by 4.76%. Meanwhile, the Bank of Japan and European Central Bank’s policy outlook remains uncertain, with swap markets forecasting a low chance of rate cuts at their upcoming meetings.
