The Bloomberg Dollar Index rose 0.5% for a fourth straight session, while the U.S. September flash composite PMI climbed to 58.4, the highest since July 2021. According to Sina Finance, the stronger U.S. business activity reading boosted market expectations for further Federal Reserve rate hikes.

The dollar rose 0.6% against the yen to 158.31, breaking above the level reached last Friday when the Bank of Japan was reportedly checking the market. The euro fell as much as 0.6% to 1.1384, its lowest level in nearly two months, while sterling also declined for a third straight day to its weakest since early July.

ING strategist Francesco Pesole said the dollar remained resilient as oil prices fell and market risk appetite improved. He added that when oil prices fall, markets may cut bets on European Central Bank rate hikes faster than bets on Federal Reserve hikes, leaving the euro exposed to further downside.