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Gold Price Holds Near Record High as Cooling U.S. Inflation Offsets Fed Caution 
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U.S. Imposes 25% Tariff on Select Brazilian Imports After Section 301 Trade Investigation 
Asian Stocks Slide as Oil Surge, U.S.-Iran Tensions and Fed Rate Bets Weigh on Markets 
Oil Prices Rise as U.S. Strikes on Iran Raise Strait of Hormuz Supply Fears 
Asian Currencies Stay Rangebound as Middle East Tensions, Weak China GDP Weigh on Sentiment 
South Korea’s KOSPI Enters Bear Market Despite Remaining 2026’s Best-Performing Major Stock Index 
Gold Price Holds Near $4,000 as Middle East Tensions and Fed Rate Hike Bets Grow 
Asian Stocks Rise as Softer U.S. Inflation Boosts Sentiment Despite Middle East Tensions 
Australian Business Conditions Hold Steady as Easing Cost Pressures Face New Oil Price Risks 
Asian currencies traded mostly flat on Monday as the U.S. dollar weakened following news that the U.S. government had opened a criminal investigation involving Federal Reserve Chair Jerome Powell, raising fresh concerns about the independence of the U.S. central bank and weighing on investor confidence.
The U.S. Dollar Index, which tracks the greenback against a basket of major global currencies, slipped 0.2% from a one-month high, while U.S. Dollar Index futures were also down 0.2% in early Asian trading. The pullback in the dollar came as markets reacted defensively to political uncertainty in the United States, prompting investors to reassess risk exposure across global markets.
Sentiment was shaken after reports emerged that Powell told lawmakers the administration had threatened the Federal Reserve with a potential criminal indictment. The issue reportedly stems from his Senate testimony regarding cost overruns tied to renovations at the Fed’s headquarters. The situation has fueled worries about political pressure on the Federal Reserve, undermining confidence in U.S. institutions and dampening risk appetite across Asia.
Against this backdrop, most Asian currencies showed limited movement. The Japanese yen weakened slightly, with USD/JPY rising around 0.2%, while the Singapore dollar remained largely unchanged against the U.S. dollar. The South Korean won stood out as the session’s biggest mover, with USD/KRW jumping about 0.7%, reflecting localized market pressures.
In China, the yuan was stable, with the onshore USD/CNY pair little changed and the offshore USD/CNH edging 0.1% lower. The Indian rupee also traded in a narrow range, showing minimal reaction to global developments. Meanwhile, the Australian dollar edged 0.2% higher against the greenback, supported by the softer U.S. dollar and broader expectations of easier U.S. monetary policy.
Investor focus was further shaped by U.S. economic data released last Friday, which showed nonfarm payrolls growth slowed more than expected in December. The weaker jobs report reinforced expectations that the Federal Reserve may deliver interest rate cuts later this year. Markets are now pricing in at least one additional Fed rate cut in 2026, with some traders anticipating as many as two reductions.
Attention now turns to the upcoming U.S. consumer price index data for December, due Tuesday, a key inflation reading that could influence expectations ahead of the Federal Reserve’s next policy meeting later this month.
