The dollar index rose by +1.03% to a 1-week high on Monday as global trade tensions eased with the EU and US trade deal. The US Jul Dallas Fed manufacturing outlook survey hit a 6-month high. EU-US trade deal sees the EU facing 15% tariffs, lower than Trump’s threats. Expectations for the Fed to keep interest rates steady are supportive of the dollar. EUR/USD sold off by -1.29% as the EU-US trade deal favored the US, posing headwinds to the Eurozone economy. ECB Governing Council member Kazimir’s hawkish comments supported the euro. Swaps are pricing in a 17% chance of an ECB rate cut in September. USD/JPY rose by +0.59% as the yen fell to a 1-week low due to easing global trade tensions and higher T-note yields. The yen continues to be undercut by concerns over fiscal deterioration in Japan’s government finances. Precious metals fell on Monday, with gold reaching a 2.5-week low and silver a 1-week low. The dollar index rally and easing global trade tensions weighed on metals. Precious metals receive support from geopolitical risks and fund buying after ETF holdings rose to multi-year highs.

Read more at Yahoo Finance: Dollar Rallies as Euro Slumps on the EU-US Trade Deal