The dollar index rose to its highest level in two weeks, driven by escalating geopolitical risks following the United States' move to arrest Venezuelan President Nicolas Maduro.
The dollar index rose 0.3%, its strongest performance since December 22. Meanwhile, benchmark U.S. Treasury yields fell by one basis point, the euro declined 0.3%, and the Mexican peso lost 0.7% of its value.
Dollar rush amid Venezuelan panic
Traders are flocking to the dollar amid uncertainty over Venezuela's future, following the US arrest of Maduro and statements by US President Donald Trump about Washington's intention to take over the administration of the South American country.
A series of anticipated US economic reports this week are expected to affect the dollar's performance, including inflation and non-farm payroll data.
Other factors that move the dollar
Christopher Wong, an analyst at Overseas-Chinese Banking Corp in Singapore, said that developments in Venezuela suggest a swift resolution rather than a slide into a protracted military conflict.
He concluded: Although these developments support demand for precious metals, the dollar's movements this week will depend primarily on data, given the momentum of labor market reports and economic surveys.
