The dollar held a three-day advance against major peers Monday after greater-than-forecast US jobs growth spurred traders to increase bets the Federal Reserve will raise interest rates this year.
The Bloomberg Dollar Spot Index has gained as the probability of higher US borrowing costs by December rose to 47%, from 36% at the start of last week. Friday’s labour report helped push a gauge of economic surprises to the highest since 2014.
Hedge funds and other large speculators boosted bullish dollar bets to the most since February last week, even before the payrolls data.
China's exports and imports fell more than expected in July in a rocky start to the third quarter, suggesting global demand remains weak in the aftermath of Britain's decision to leave the EU.
Exports fell 4.4 percent from a year earlier, the General Administration of Customs said on Monday, while adding that it expects pressure on exports is likely to ease at the beginning of the fourth quarter.
Imports fell 12.5 percent from a year earlier, the biggest decline since February, suggesting domestic demand remains sluggish despite a flurry of measures to stimulate growth.
That resulted in a trade surplus of $52.31 billion in July, versus a $47.6 billion forecast and June's $48.11 billion.
Japanese Prime Minister Shinzo Abe said on Monday that the government will compile an extra budget plan and submit it to an extraordinary parliament session in autumn.
Abe's cabinet last week approved 13.5 trillion yen ($132 billion) in fiscal measures to help revive the flagging economy.
Oil prices rose on Monday, lifted by reports of renewed talks by some members of the Organization of the Petroleum Exporting Countries (OPEC) to restrain output.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $41.99 per barrel at 0643 GMT (2:43 a.m. ET), up 19 cents, or 0.5 percent, from their last close.
Brent futures LCOc1 were trading at $44.42 per barrel, up 15 cents, or 0.34 percent.
The price rise came on the back of renewed calls by some OPEC members to freeze production in a bid to rein in output that has been consistently outpacing demand, a demand that non-OPEC oil producing giant Russia was quick to dismiss.
"OPEC members including Venezuela, Ecuador and Kuwait are said to be behind this latest reincarnation. But just like previous endeavors, it seems doomed to fail," said Matt Smith of ClipperData.
Yet in the absence of an agreement, the crude and refined product glut is still weighing on markets.
Reference: Reuters, Fin24
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