The USD/JPY pair experienced a downturn as it fell below the 156.00 mark, driven by increasing speculations that the Bank of Japan (BoJ) may raise interest rates. Contributing to the decline was also a steady US Dollar, which maintained its strength despite thin trading conditions due to a US market holiday. The recent release of upbeat Japanese Machinery Orders data further influenced the downward trajectory of the pair, attracting some intraday sellers.
Market dynamics shifted as traders responded to various global economic signals. The speculation surrounding a potential BoJ rate hike has intensified, leading to adjustments in currency positions. This move coincides with a stable US Dollar, which has remained resilient amidst limited trading activity.
In parallel, the AUD/USD extended its gains above 0.6200 during the Asian session on Monday. Meanwhile, gold prices reversed their earlier dip in the Asian session, buoyed by mild selling pressure on the US Dollar. However, expectations that the Federal Reserve might pause its rate-cutting cycle could potentially limit the upside for XAU/USD against a backdrop of positive risk sentiment.
Traders remain optimistic as they look forward to the upcoming inauguration of US President-elect Donald Trump, anticipating potential policy shifts that may impact market conditions. On another front, the People's Bank of China (PBOC) maintained its Loan Prime Rate unchanged, offering stability in the Chinese financial landscape.
Adding to the dynamic market environment, Ripple continued its upward rally on Monday after surpassing its symmetrical triangle pattern last week. This movement highlights ongoing investor interest and confidence in the cryptocurrency market.
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