The dollar index (DXY00) rose by +0.97% on Monday and posted a 5-week high. The dollar rallied on Monday after oil prices surged to an 8.25-month high, boosting inflation expectations and reducing the chance of additional Fed rate cuts, a supportive factor for the dollar. Also, Monday's better-than-expected Fed ISM manufacturing report was supportive of the dollar. In addition, sharply higher T-note yields on Monday strengthened the dollar's interest rate differentials.
The US Feb ISM manufacturing index fell -0.2 to 52.4, stronger than expectations of 51.5. The Feb ISM prices paid sub-index rose +11.5 to a 3.5-year high of 70.5, stronger than expectations of 60.0.
