By Hilary Russ
| NEW YORK
NEW YORK The dollar slipped to a more than six-month low on Monday, weighed down by an uncertain U.S. political climate, while oil prices rose on expectations that crude output cuts would continue and the euro surged.Wall Street gained, lifted by defense and technology stocks after U.S. President Donald Trump announced arms deals of up to $350 billion with Saudi Arabia over the weekend. [.N]The euro hit a more than six-month high after German Chancellor Angela Merkel said it was "too weak" because of the European Central Bank's ultra-low interest rates and money printing program.The dollar last week notched its largest weekly drop since April 2016 on concerns that turmoil in Washington could delay U.S. President Donald Trump's efforts to implement economic stimulus plans. Traders have also been reassessing their assumptions about the path of further Federal Reserve interest rate hikes this year. "The dollar's broad declines are driven by the increasingly mixed tone to U.S. economic data, which has led to investors questioning the extent to which the Fed will be raising rates this year, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The political climate is also acting as a key headwind for the dollar," he said.
Tracking the greenback against a basket of major currencies, the dollar index .DXY fell 0.2 percent, with the euro EUR= up 0.31 percent to $1.1239. "The thing with euro/dollar is that you have quite a positive mood on the euro at the moment," said ABN Amro FX strategist Georgette Boele. "And when Merkel makes comments that the euro is probably too low then this is taken as another positive reason to push it higher."Sterling GBP= was also in the firing line, last trading at $1.3002, down 0.25 percent on the day, after polls showed Britain's election race tightening and the country's chief Brexit negotiator again threatened to walk away from EU exit talks unless the bloc eased its demands. The Dow Jones Industrial Average .DJI rose 93.76 points, or 0.45 percent, to 20,898.6, the S&P 500 .SPX gained 11.35 points, or 0.48 percent, to 2,393.08 and the Nasdaq Composite .IXIC added 43.61 points, or 0.72 percent, to 6,127.31.
Some European shares dipped, in part on political concerns in Spain after its Socialists on Sunday chose former leader and hardliner Pedro Sanchez to once again head the party.The pan-European FTSEurofirst 300 index .FTEU3 lost 0.11 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.52 percent.Oil prices hit their highest levels in more than a month on growing confidence that the Organization of the Petroleum Exporting Countries and other producers would agree this week to extend supply cuts.
U.S. crude oil futures settled at $50.73 cents per barrel, up 40 cents or 0.79 percent. CLc1 Brent LCOcv1 was last at $53.80, up 0.35 percent on the day.U.S. Treasury yields were little changed as selling tied to this week's government and corporate bond supply offset safe-haven bids underpinned by worries about investigations into possible links between Trump's campaign officials and Russia.The yield on benchmark 10-year notes US10YT=RR was last 2.252 percent.Spot gold XAU= added 0.5 percent to $1,261.23 an ounce. U.S. gold futures GCcv1 gained 0.61 percent to $1,261.20 an ounce.Copper CMCU3 rose 0.63 percent to $5,718.00 a ton, while zinc CMZN3 and nickel CMNI3 prices touched two-week highs after China launched a regional crackdown on the steel industry, including production of the two metals. (Additional reporting by Patrick Graham, Ritvik Carvalho and Zandi Shabalala in London; Tanya Agrawal in Bengaluru; Danilo Masoni in Milan; Richard Leong, Saqib Iqbal Ahmed and Scott DiSavino in New York; Editing by Bernadette Baum and Meredith Mazzilli)
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Updated Date: May 23, 2017 01:45 AM