The US dollar continued its hot streak on Monday and touched a three-week high against the yen after Federal Reserve officials added more hopes on interest rate hike this coming months and the release of inflation and spending data yesterday.
Consumer spending in US was in line with expectations as it climbed 0.3% while the personal consumption expenditures (PCE) price index surged 0.1% in July and was up 0.6% compared last year.
In effect, the dollar index hit its two-week high against basket of major currencies as it closed 95.805.
The greenback rose 0.45% against the Japanese yen, and last closed at 102.32, its highest since August 9, following the 1.3% gain recorded on Friday. The euro dropped 0.03% and last traded at 101.93.
US dollar is seen to move towards 105 level against yen if the payroll figures is strong, which is the next major economic data, set to be released this Friday.
Oil prices snapped its two consecutive days of gain as it slid nearly 2% on Monday amid the renewed concerns on global supply glut, increase in crude stockpiles and a stronger dollar prompted by speculation on US rate hike.
International Brent crude oil dropped 66 cents or 1.32% and last traded at $49.26 a barrel, erasing its previous gains from last two sessions.
US West Texas Intermediate also lost 66 cents, or 1.40%, to finish $46.98 per barrel after falling more than $1 at session low.
Iraq, one main exporter for its southern ports, was reported to continue ramping up output according to its oil minister last Saturday. This built more caution over galloping Middle East crude output.
Moreover, the US crude stockpiles rose for a second-straight week last week and logged 1.3 million barrels.