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The dollar retreated on Monday, as oil prices fell and stock markets rose ahead of a week packed with events, including the US congressional midterm elections, a batch of US labor market data, and interest rate decisions from several central banks.
Crude oil prices fell by about 6% after continued talks between Iranian and Qatari officials to end the US-Israeli war on the Islamic Republic raised hopes for reducing supply disruptions from the Middle East.
The decline in oil prices helped support stocks after the Nasdaq index saw in October its largest monthly drop since March 2025, due primarily to growing concerns about companies' massive spending on emerging artificial intelligence technology.
Mark Chandler, chief market strategist at Bannockburn Capital Markets in New York, said, "What we are seeing in general is a resilient market. Oil prices and West Texas Intermediate crude for December tested the $105 per barrel level on Friday, and we are now below the $100 (dollar) level."
He added, "Everything looked bad at the start of the week. Stock prices fell, and oil prices hit decade-highs for December WTI crude, then we returned from the weekend, and this is like a collective sigh of relief."
The dollar index, which measures the value of the US currency against a basket of currencies including the yen and the euro, fell 0.38% to 101.59 points, heading for its largest daily drop since October 15.
The euro rose 0.48% to $1.1212, even after Fitch Ratings adjusted its outlook on France from "stable" to "negative" late Friday.
Traders are preparing for a busy week dominated by the US midterm elections, US jobs data for October, and interest rate decisions from central banks in Britain, Australia, Norway, and Sweden.
Regarding cryptocurrencies, Bitcoin fell 0.06% to $77,765.90. Ether rose 1.06% to $2,286.31, stabilizing slightly after an unprecedented robbery at Binance, the world's largest digital currency exchange platform, last week, in which $6.3 billion was stolen.
Binance reported that its customers have withdrawn nearly five billion dollars since it reopened following the hack.
Americans head to the polls on Tuesday to determine whether the Democrats will be able to wrest control of Congress from the Republican Party led by President Donald Trump.
Democrats are widely expected to win the House of Representatives, but the fate of the Senate remains less clear.
The British pound rose 0.22% to $1.3424. Purchasing Managers' Index (PMI) data showed that British manufacturers began the final quarter of 2026 with the strongest production growth in over two years, although the speed of rising costs may worry the Bank of England, which is expected to raise interest rates this week.
The dollar rose 0.08% to 157.66 Japanese yen. The Bank of Japan, in the full version of its quarterly outlook report, indicated that real interest rates in Japan have risen recently.
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