Dollar gains on improving US business activity, tariff optimism
The dollar jumped to multi-week highs against the euro and yen on Monday after data showed U.S. business activity picked up in March and reports that U.S. President Donald Trump will be flexible with upcoming tariffs.
In cryptocurrencies, bitcoin was also bolstered by improving risk sentiment and reached $88,772, the highest since March 7.
S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion in the private sector.
The services sector accounted for the rise in the PMI, partly attributed to a thaw in temperatures as spring sets in. Manufacturing slid back into contraction territory after two straight months of growth.
"Overall, the services side is a much more important component of the U.S. economy so I take this as good news," said Adam Button, chief currency analyst at ForexLive in Toronto.
The greenback also rose against the Japanese yen earlier on Monday after Bloomberg News and the Wall Street Journal reported that the Trump administration was likely to exclude a set of sector-specific tariffs while applying reciprocal levies on April 2.
The dollar was last up 0.82% on the day against the Japanese currency at 150.54 yen . It earlier reached 150.75, the highest since March 3. The currency pair moved in sync with rising Treasury yields, with 10-year yields gaining 8.3 basis points on the day to 4.335%.
The euro fell 0.09% to $1.0804 and slid as low as $1.078, its weakest since March 7.
Sterling gained 0.04% to $1.292 ahead of British finance minister Rachel Reeves' spring budget update later this week.
Markets also have an eye on a potential Black Sea ceasefire deal as U.S. and Russian officials began talks in Saudi Arabia on Monday.
Source: Reuters
