The dollar rose against other currencies as inflation fears resurfaced after major oil producers unexpectedly cut production targets. Traders bet the Federal Reserve will raise interest rates again next term.
Sunday’s announcement of targeted production cuts by OPEC and its allies, known as OPEC+, sent oil prices up about 7.5% in early trading in Asia on Monday. Brent crude was last at $84.13 a barrel, up $4.22, or 5.32%.
At Sunday’s meeting, OPEC+ was expected to stick to the 2 million bpd cut it had already set until the end of 2023 but announced a further output cut of around 1.17 million bpd.
The euro was last down 0.12% at $1.0836 after hitting $1.0787 earlier in the session, while the dollar was up 0.5% at 133.57 Japanese yen.
Sterling settled at $1.2318, retreating 0.12% on the day, while the dollar advanced 0.32% against the Swiss franc.
A US Commerce Department report on Friday revealed a 5.0% year-on-year increase in the consumer price index for February. A measure of core inflation as a positive indicator of future price increases was lower than expected at 4.7%.
US consumer sentiment retreated in February for the first time in four months on fears of a looming recession. This week will focus on US activity data and Friday’s jobs report.
The risk-sensitive Australian dollar last advanced 0.12% to $0.6694 ahead of Tuesday’s Reserve Bank of Australia policy meeting. Meanwhile, the kiwi retreated 0.42% to $0.6231.
In cryptocurrencies, Bitcoin fell 1% to $27.91. Ethereum last retreated 0.2% to $1,792.