On Monday, the U.S. dollar saw a rise in its value, buoyed by growing optimism regarding potential rate cuts in June. 

This surge was propelled by fresh data indicating a positive turn in the U.S. manufacturing sector, which showed signs of growth for the first time in a year and a half.

According to the Institute for Supply Management (ISM), March marked a turnaround, with production bouncing back and new orders increasing. 

However, the employment situation in factories remained sluggish, and the cost of inputs surged, putting pressure on prices.

The resurgence in manufacturing marked the end of a long and dreary period of 16 consecutive months of contraction, a stretch not seen since the early 2000s. 

Manufacturing, which contributes about 10.4% to the economy, had been grappling with decline since September 2022.

The dollar's strength was reflected in the dollar index, which measures its value against six other major currencies. The index witnessed a 0.469% climb, reaching 104.97.

Market sentiments shifted on Monday, with reduced expectations of rate cuts by the Federal Reserve in June. 

This shift followed a report on Friday indicating a slowdown in U.S. price hikes, as per the CME FedWatch tool.

The Consumer Price Index for the 12 months leading up to February surged by 3.2%, outpaced its average growth rate from 2000 to 2019 by a full percentage point. The Commerce Department's Bureau of Economic Analysis has stated.

However, the Personal Consumption Expenditures (PCE) deflator, another measure of inflation, retreated below the 3% mark. This unexpected dip contradicted earlier forecasts of a 0.4% increase.

Federal Reserve Chair Jerome Powell expressed contentment with the latest inflation figures, deeming them in line with the Fed's objectives.

This sentiment influenced market predictions, with the likelihood of a 25-basis point interest rate cut in June.  Investors have found reassurance in the Fed's stance on tolerating inflation levels above the target of 2%, even as discussions about potential rate cuts loom. 

Meanwhile, all eyes in the currency market remained fixated on the Japanese yen's movements. 

Its trajectory toward levels last seen in 1990 raised concerns of potential intervention by Japanese authorities to stabilize its value.

As the dollar maintains its upward trajectory, market participants remain watchful for any further developments that could impact the currency's strength and future policy decisions by the Federal Reserve.