Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut their ties with Qatar on Monday, accusing it of supporting terrorism, in an unprecedented breach between the most powerful members of the Gulf Cooperation Council.

The coordinated move dramatically escalates a dispute over Qatar's support of the Muslim Brotherhood, the world's oldest Islamist movement, and adds accusations that Doha even backs the agenda of regional arch-rival Iran.

A split between Doha and its closest allies can have repercussions around the Middle East where Gulf states have used their financial and political power to influence events in Libya, Egypt, Syria, Iraq and Yemen.

Qatari stocks plunged in response to the news, with Doha's QE Index tumbling roughly 8%, its worst daily losses since the 2009 financial crisis.

The British pound is rising today after a recent drop following Saturday’s terror attack in London - the third attack in Britain in recent months - which left seven dead and many injured after a van mowed down pedestrians on London Bridge.

On Sunday, U.K. police said they arrested 12 people in east London in connection with the attack. Islamic State has claimed responsibility.

The attack came days ahead of Thursday's U.K. election, in which polls show British Prime Minister Theresa May's lead over the opposition Labour Party has narrowed but is still intact.

Gold prices rose to their highest level since April 20 on Monday, touching a daily peak of $1,284.67, as market players monitored mounting geopolitical tension in the Middle East as well as the fallout from the weekend terror attack in London.

Prices of the yellow metal got additional support after last week's disappointing U.S. employment report saw investors temper expectations for more rate hikes by the Federal Reserve in the second half of the year.

Oil prices rose on Monday, after Saudi Arabia and three other countries severed diplomatic ties with Qatar, fueling concerns over geopolitical instability in the Middle East.

Market participants are sensitive to Middle East tensions because they worry about supply disruptions from the region.

U.S. crude was at $48.05 a barrel, up 39 cents, or around 0.8%, while Brent gained 36 cents to $50.31.

Market players will focus on more U.S. economic data on Monday for further signs of the Federal Reserve's likely rate hike trajectory through the end of the year.

Monday will see services PMI data for May released at 13:45 GMT, while ISM non-manufacturing data for May and factory orders for April are both scheduled for 14:00 GMT.

Data on Friday showed that U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low.

Most analysts believe the poor data will not stop the Fed from raising interest rates at its meeting later this month, but traders now expect a more dovish path in the second half of the year.

The USD index, which tracks the currency against a basket of six major currencies, edged up 0.1% to 96.73, not far from Friday's nadir of 96.64, its lowest since November 9.