Dollar Strengthens Amid Risk-Off Sentiment: ISM + Energy Effect
The US dollar strengthened again in the US session on Monday (March 2) after the ISM manufacturing data confirmed that factory activity remained expansive (52.4), but price pressures intensified, with Prices Paid soaring to 70.5—the highest in almost 3.5 years. The combination of "the economy is still running + costs are rising" made the market more defensive and gave the dollar a breather.
The DXY held firm around 98.4–98.5, or up almost 1% near its strongest peak since late January.
The pressure was felt most strongly in Europe: EUR/USD weakened 1% to around 1.1717 as markets assessed that energy and cost shocks could make interest rate cuts in Europe more difficult.
In Asia, the yen also weakened: USD/JPY moved around 157.3 as markets factored in energy costs (which are heavy for Japan) and the lingering geopolitical risk premium.
The Swiss franc also came under pressure against the dollar; USD/CHF hovered around 0.779. The SNB even signaled its readiness to intervene if the turmoil worsens.
Meanwhile, risk-sensitive currencies were impacted: AUD/USD was last around 0.7025, and the offshore yuan weakened to 6.8861 per dollar—markets are becoming more cautious due to expensive energy and global uncertainty.
Source: Newsmaker.id
