The dollar index rose 0.05% as crude oil fluctuations and Middle East tensions provided support. WTI crude oil prices climbed more than 2% to a one-week high, raising inflation expectations and the prospect of further Fed tightening, before erasing most gains after Pakistan signaled the US and Iran were close to an arrangement over the Strait of Hormuz. Safe-haven demand also underpinned the dollar after an Iranian missile targeted another UAE tanker on Saturday and Houthi militants claimed an attack on Saudi Arabia's Jazan refinery on Sunday. US July existing home sales fell 1.7% month-over-month to 4.06 million, near the expected 4.05 million. The euro slipped 0.02% against the dollar, pressured by the stronger greenback and the rally in crude oil, which is bearish for the energy-importing Eurozone economy. The yen was down 0.03% but rebounded from a one-week low as crude oil gave up gains and Treasury notes turned lower, with trading subdued due to Japan's Mountain Day holiday. Gold rose 0.59% to a two-and-a-quarter-month high, supported by expectations that Wednesday's US July CPI report will show core inflation easing to 2.5% year-over-year and by China's central bank adding 640,000 ounces to its gold reserves last month, the largest increase in more than two and a half years.
