The US dollar is rising to kick off the trading week, buoyed by the sea of red ink drowning the financial markets. The greenback has struggled to maintain the momentum of 2021, but the recent selloff in the equities arena could be the catalyst to support the buck.

US stock market indexes declined Monday, although they did pare some of their losses. Toward the end of the trading session, the Dow Jones Industrial Average was down more than 500 points, the S&P 500 shed 1.4%, and the Nasdaq Composite Index fell about 200 points.

Investors were hitting the sell button primarily on the Federal Reserve expected to raise interest rates in the next couple of months in response to surging inflation. The US central bank has also been winding down its asset purchases that had injected trillions into Wall Street and Main Street since the early days of the coronavirus pandemic.

Meanwhile, on the data front, growth eased considerably in January.

The IHS Markit composite purchasing managers’ index (PMI) plunged to 50.8. The manufacturing PMI fell to 55, while the services PMI plummeted to 50.9. All three PMIs showed the same thing: labor and material shortages and higher prices. New order growth slowed, while output levels remained about the same.

Business confidence did improve to its highest level in November 2020 due to expectations of enhanced supply flows and the pandemic waning.

The US Treasury market was mostly mixed to start the trading week, with the benchmark 10-year yield down 0.014% to 1.733%. The one-year bill added 0.005% to 0.557%, while the 30-year bond rose 0.012% to 2.074%.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, rose 0.23% to 95.86, from an opening of 95.64. The index is coming off a weekly gain of about 0.5%, but it is still down 0.1% on the year.

The USD/CAD currency pair advanced 0.58% to 1.2653, from an opening of 1.2580, at 18:22 GMT on Monday. The EUR/USD tumbled 0.19% to 1.1325, from an opening of 1.1344.