The dollar index (DXY00) fell by -0.09% on Monday, pressured by a contracting Dec Empire manufacturing survey and dovish comments from Fed Governor Stephen Miran. The Fed’s policy stance was criticized as unnecessarily restrictive on the economy. Markets are pricing in a 22% chance of a 25 bp rate cut at the January FOMC meeting.

EUR/USD (^EURUSD) rose by +0.09% to a 2.5-month high on Monday, boosted by a weaker dollar and positive Eurozone Oct industrial production data. The euro is supported by divergent central bank policies, with the Fed expected to cut interest rates in 2026 while the ECB’s rate-cutting cycle is perceived to be over.

USD/JPY (^USDJPY) fell by -0.37% as the yen climbed to a 1-week high against the dollar on Monday. Strong Japanese economic data and expectations of a BOJ rate hike at Friday’s policy meeting supported the yen. Lower T-note yields also contributed to the yen’s strength.

Gold and silver prices rose on Monday, supported by a weaker dollar, lower T-note yields, and dovish comments from Fed Governor Stephen Miran. Precious metals are seen as a store of value amid uncertainties and expectations of an easier monetary policy in 2026. Central bank demand for gold remains strong.

China’s Nov industrial production eased to +4.8% y/y, retail sales rose +1.3% y/y, and new home prices fell 0.39% m/m. The data showed signs of economic slowdown, with retail sales growing at the slowest pace in 2.75 years and continued declines in new home prices.

Read more at Yahoo Finance: Dollar Falls Ahead of Tuesday’s US Payrolls Report