Dollar rose against most major rivals on Monday ahead of the crucial Federal Reserve's meeting this week.

First Republic 

JPMorgan Chase announced an acquisition deal of most of First Republic's assets after the bank lost over 100% of its value and lost most of its deposits, sparking a new banking crisis in the US. 

US regulators announced its decision to control all deposits at the bank, in preparation for an asset selloff. 

JPMorgan Chase thus intervened to buoy up the market and prevent further collapses. 

Fed's Meeting

The Federal Open Market Committee is convening tomorrow to discuss policies amid the ongoing banking crisis and stubborn inflation.

Most analysts remain convinced the Fed will raise interest rates by 25 basis points. 

The bank is then likely to cease policy tightening and assess ongoing conditions.

Additionally, a batch of corporate results are coming out this week, including Apple, after Microsoft, Meta, Alphabet, Tesla all released their strong quarterly results last week. 

Data

US ISM manufacturing improved a bit to 47.1 in April from 46.3 in March, beating expectations but remaining in shrinkage zone. 

On trading, the dollar index rose 0.5% as of 20:59 GMT to 102.1, with a session-high at 102.1, and a low at 101.6. 

Yen

USD/JPY rose 0.9% as of 21:09 GMT to 137.5. 

Japan's manufacturing PMI settled at 49.5 last month, remaining at shrinkage zone below 50. 

Loonie

Canadian dollar rose 0.1% against US counterpart as of 21:12 GMT to 0.7381. 

International benchmark Brent crude lost over 2% in European trade today, resuming losses after a two-day hiatus off four-week lows. 

The decline comes amid renewed concerns about Chinese demand following disappointing manufacturing data, which showed an unexpected shrinkage in April.

Brent Today

Brent tumbled 2.2% to $78.33 a barrel, with a session-high at $80.20, after rising 2.6% on Friday, the second profit in a row away from four-week lows at $77.40 a barrel. 

Crude tumbled 1.5% last week, the second weekly loss in a row on concerns about global recession and its impact on fuel demand while Russian crude exports climbed in April. 

Chinese Demand 

Recent Chinese data showed a surprise decline in manufacturing activities in April, sparking concerns of a recession in the world's second largest economy.

China's manufacturing PMI fell to 49.2 in April from 51.9 in March, missing estimates of 51.4.

The Dollar

The dollar index rose 0.3% on Monday for the third straight session against a basket of major rivals, in turn pressuring commodity and metal prices. 

Such gains came ahead of the Federal Reserve's policy meeting tomorrow, expected to end with a 0.25% rate hike to 5.25%, the highest since mid-2007. 

Dollar rose in European trade on Monday, maintaining gains for the third straight session and almost hitting one-week high following weak Chinese data and amid an expected US Fed rate hike this week. 

Now investors await US data later today, which might provide important clues on the health of the world's largest  economy in the second quarter of the year. 

The Index

The dollar index rose 0.3% to 101.96, with a session-low at 101.64, after rising 0.2% on Friday, the second profit in a row, marking a week-high at 102.17, after data showed flat consumer sending in March. 

Chinese Economy

Recent Chinese data showed a surprise decline in manufacturing activities in April, sparking concerns of a recession in the world's second largest economy. 

China's manufacturing PMI fell to 49.2 in April from 51.9 in March, missing estimates of 51.4. 

The Federal Reserve

The Fed is starting is two-day policy meeting tomorrow, expected to lead to a 0.25% rate hike for the third time in a row.

Fed officials asserted recently that inflationary pressures remain strong in the US and require further policy tightening. 

Goldman Sachs expects the Federal Reserve to pause any moves during June following the May's 0.25% hike, and to engage in reviewing future outlook for the economy and policies. 

US Rates

Current pricing for a 0.25% Fed rate hike this week stands at 87%. 

Manufacturing 

Later today, US ISM manufacturing PMI is expected slightly up at 46.8 in April from 46.3 in March, remaining in the shrinkage zone. 

Sterling rose in European trade for the fourth straight session again yen, hitting seven-month highs after trespassing 170 yen on prospects of a widening policy gap between the UK and Japan. 

Bank of Japan is expected to increase interest rates by 25 basis points next week, while Bank of Japan has ruled out rate hikes in the forseeable future. 

GBP/JPY rose 0.7% to 172.09, the highest since October 2022, with a session-low at 170.93, after spiking 2.25% on Friday, the third profit in a row and the largest since October 2022 after Bank of Japan's meeting. 

Bank of Japan 

Recent US consumer prices and wages data show that inflationary pressures remain strong and there's a need for upcoming interest rates hikes following the expected May's 0.25% hike. 

Bank of England Governor Andrew Bailey said there might be a need for more UK rate hikes if signs of inflationary pressures insisted. 

Deutsche Bank raised its estimates for peak UK interest rates from 4.25% to 4.75%, which it means it expected an additional 0.25% hike following the May one. 

Bank of Japan 

Bank of Japan at its first meeting under new governor Kazuo Ueda maintained interest rates at the record low of minus 0.1%.

The BoJ also decided to maintain targets for 10-year treasury yields at zero, and overall maintaining policies unchanged to support economic recovery in the country.

The BoJ decided to conduct large-scale reviews for monetary easing measures in the next year.

The bank said that achieving price stability has proved challenging for the past 25 years, and that monetary easing policies impacted a wide sector of the economy and the financial sector.

The BoJ decided to remove future directives and pledges to maintain rates at current levels, while asserting it'll keep expanding the monetary base until consumer prices reach the 2% target.