2023.10.0220:34:00UTC+00Dollar Gains Against Major Counterparts

The U.S. dollar climbed higher on Monday after the nation's government avoided a shutdown, and data showing an improvement in U.S. manufacturing activity in the month of September raised the possibility of the Federal Reserve holding rates higher for longer.

Bond yields rose after U.S. lawmakers passed a last minute, temporary spending bill over the weekend to keep the U.S. government open.

"With a temporary funding solution in place, Wall Street quickly returned to fueling the bond market selloff, which helped send the dollar higher across all its major trading partners," says Edward Moya, Senior Market Analyst at OANDA.

On the U.S. economic front, the Institute for Supply Management released a report showing a modest slowdown in the pace of contraction in U.S. manufacturing activity in the month of September.

The ISM said its manufacturing PMI rose to 49.0 in September from 47.6 in August, although a reading below 50 still indicates a contraction. Economists had expected the index to inch up to 47.7.

A separate report released by the Commerce Department showed construction spending in the U.S. increased in line with economist estimates in the month of August.

The Commerce Department said construction spending climbed 0.5% to an annual rate of $1.984 trillion in August after jumping by an upwardly revised 0.9% to a rate of $1,847.3 billion in July.

Economists had expected construction spending to rise by 0.5% compared to the 0.7% increase originally reported for the previous month.

The dollar index climbed to 107.00, gaining 0.73%.

Against the Euro, the dollar firmed to 1.0484 from 1.0573. The dollar has strengthened to 1.2093, gaining from 1.2199.

Against the Japanese currency, the dollar is up, fetching 149.84 yen a unit, rising from 149.37 yen.

The dollar is gaining more than 1% against the Aussie, at 0.6364. Against Swiss franc, the dollar has surged higher, fetching C$ 0.9181, and against the Loonie, it is up at C$1.3677.