The dollar index (DXY00) rose by +0.15% on Monday. Political risk and social unrest in France are weighing on the euro, benefiting the dollar. Also, WTI crude oil jumped more than 2% on Monday to a 5-week high, raising inflation expectations and potentially pushing the Fed to tighten monetary policy, which supports the dollar.
However, the dollar fell from its best level on Monday after the US Oct NAHB housing market index fell more than expected to a 14-year low. The dollar was also under pressure after the Chinese yuan rallied to a 4-year high on Monday, undercutting the dollar. In addition, Monday’s stock strength has reduced demand for dollar liquidity.
