Dollar Gain, Strong Manufacturing Data Boost Market Optimism
The US dollar remained strong after US manufacturing data came in above expectations. The Bloomberg Dollar Index briefly touched its highest level of the day, while precious metal prices continued to weaken after Friday's historic plunge—which also put pressure on commodity currencies.
The Bloomberg Dollar Spot Index rose 0.3% (having previously risen as high as 0.4%), reaching its highest intraday level since January 23. The trigger came from Institute for Supply Management data: the ISM manufacturing index jumped to 52.6 from 47.9 (market forecast 48.5)—a positive surprise that further boosted the dollar's appeal.
Earlier, the dollar also strengthened as gold and silver extended declines. However, after the London open, that gain lost some steam as the market began to rebalance positions.
In the currency market, AUD/USD fell 0.3% to 0.6944 ahead of the Australian central bank's interest rate decision on Tuesday. Goldman Sachs economists expect interest rates to remain on hold, although market consensus still points to a 25 bps hike.
Meanwhile, USD/JPY rose 0.5% to 155.63 after Sanae Takaichi attempted to clarify her comments about the weak yen, calling it a "huge opportunity" for the export industry. However, Japanese official Masanao Ozaki said Takaichi was not highlighting the "benefits of a weak yen" in her weekend remarks.
Other movements: USD/CHF jumped 0.9% to 0.7799 as the franc was also affected by the weakening of precious metals. EUR/USD fell 0.5% to 1.1791, and GBP/USD fell 0.2% to 1.3661. The euro was relatively unaffected by news that the French parliament approved the 2026 budget, after Prime Minister Sébastien Lecornu survived two no-confidence motions.
Source: Newsmaker.id
