The dollar index dropped 0.4% to around 106.2 on Monday, reaching an 11-week low as the euro surged following the conservative victory in Germany's general election. Friedrich Merz, leader of Germany's conservative opposition, is now expected to form a coalition government aimed at pushing through fiscal reforms. The dollar has also been under pressure amid growing concerns about the US economy, which could prompt the Federal Reserve to cut interest rates further. Data released on Friday revealed that US business activity nearly stagnated in February, with services sector contraction contributing to the slowdown. Consumer sentiment also weakened, driven by inflation worries and the ongoing impact of President Trump's tariffs. Traders are now focused on this week's PCE price index report, the Federal Reserve's preferred inflation measure, and a second estimate of fourth-quarter GDP growth.

Source: Trading Ekonomi