The dollar index slipped to around 97.5 on Monday, falling for a second consecutive session as traders cautiously awaited key economic data delayed by the partial government shutdown. Markets are set to receive the January jobs report on Wednesday, with recent indicators pointing to a slowing labor market, alongside December retail sales data. The postponed January consumer price index reading is due on Friday. Markets currently expect the Federal Reserve to keep interest rates steady in March, with potential cuts in June and possibly September. The dollar also came under pressure as risk sentiment improved, supported by rebounds in tech stocks, precious metals, and cryptocurrencies. Meanwhile, the greenback remained volatile against the yen following the landslide victory of Prime Minister Sanae Takaichi’s ruling coalition in Japan’s weekend elections, which paves the way for expansionary fiscal policies.

Gold prices rose near $5,000 per ounce on Monday, its highest level in over a week, supported by a weaker US dollar as traders awaited key US economic data that could offer clearer insights into the Federal Reserve’s interest rate outlook. The January jobs report, scheduled for Wednesday and expected to show signs of stabilization in the labor market, as well as inflation data due on Friday, will be closely watched. The precious metal also gained support from political developments in Japan, where Prime Minister Sanae Takaichi’s landslide election victory has strengthened expectations of looser fiscal policy and continued downward pressure on the yen. In addition, China’s central bank extended its gold purchases for the 15th consecutive month in January, signaling sustained institutional demand. On the geopolitical front, markets are keeping an eye on US-Iran talks, with both sides agreeing to continue discussions this week to ease tensions and avoid a military confrontation.

Household spending in Australia dropped 0.4% mom in December 2025, reversing a 1.0% growth in the previous month and missing market estimates of a 0.2% increase. The latest result marked the first monthly contraction since March 2024, reflecting the impact of cost pressures and elevated interest rates. Expenditures fell for food (-0.4% vs 0.6% in November), clothing (-2.4% vs 2.5%), furnishings (-1.7% vs 2.4%), health (-1.3% vs 0.4%), recreation (-0.5% vs 2.0%), and miscellaneous items (-0.9% vs 0.2%). In contrast, spending rose for alcoholic drinks (2.0% vs -1.8%), transport (0.6% vs 0.6%), and hotels & restaurants (0.5% vs 1.2%). Regionally, spending shrank in New South Wales (-0.6%), Victoria (-1.0%), Western Australia (-0.3%), but increased in Queensland (0.2%), South Australia (0.3%), the Northern Territory (2.9%), and Tasmania (0.1%). On an annual basis, household spending grew 5.0%, the softest in four months, after a 6.0% gain in November.

WTI crude oil futures fell toward $63 per barrel on Monday, extending last week’s decline, as concerns over US-Iran conflict eased after diplomatic talks. President Trump described the discussions as “very good,” while Tehran referred to them as a “step forward.” Both sides agreed to continue negotiations this week, alleviating fears of immediate supply disruptions. However, underlying tensions remain. Trump warned that the “consequences” would be severe if a deal on Iran's nuclear program is not reached, while Tehran reiterated on Sunday that it will not abandon uranium enrichment. Elsewhere, traders are monitoring oil flows from India, after Trump announced last week that New Delhi had agreed to stop buying Russian oil as part of a trade deal, though India has yet to officially confirm the commitment, emphasizing that safeguarding its energy security remains a top priority. Investors also await OPEC+ and IEA reports later this week for further guidance on the market outlook.

Japan’s current account surplus fell to JPY 728.8 billion in December 2025 from JPY 1,071.8 billion in the same month a year earlier, falling short of market forecasts of JPY 1,060 billion. The primary income surplus inched lower to JPY 1,189.4 billion from 1,248.9 billion while the secondary income deficit edged higher to JPY 255.4 billion from JPY 242.3 billion. At the same time, the services account shifted to a deficit of JPY 340.1 billion from a small surplus of JPY 0.11 billion. In contrast, the surplus of goods account surged to JPY 134.9 billion from JPY 0.54 billion in the previous year, as exports (4.5%) rose faster than imports (3.7%).

China’s foreign exchange reserves increased by USD 41.2 billion to USD 3.399 trillion in January 2026, up from USD 3.358 trillion in December 2025. This marked the seventh consecutive monthly rise and the highest level since November 2015, supported by a persistently weaker U.S. dollar. Meanwhile, the People’s Bank of China continued to add to its gold holdings for the fifteenth consecutive month, with reserves rising slightly to 74.19 million fine troy ounces in January from 74.15 million in December 2025. The value of these holdings climbed to USD 369.58 billion, up from USD 319.45 billion a month earlier. In 2025, China’s foreign exchange reserves increased in 11 months, rising by USD 155.512 billion over the year.