The dollar fell from a 3-week high on Monday after the US Dec ISM manufacturing index unexpectedly contracted by the most in fourteen months, finishing down by -0.16%. The index fell to 47.9, weaker than expectations, marking the steepest pace of contraction in 14 months.

EUR/USD recovered from a 3-week low on Monday, finishing up by +0.06%, as the euro rebounded from weak US manufacturing news. Swaps are pricing in a 0% chance of a +25 bp rate hike by the ECB at the next policy meeting on February 5.

USD/JPY fell by -0.38% on Monday as the yen recovered from a 2.5-week low against the dollar. Hawkish comments from BOJ Governor Ueda boosted the yen, which also gained support from Japan JGB bond yields climbing to a 27-year high of 2.129%.

Gold and silver prices rallied sharply on Monday amid escalating geopolitical risks in Venezuela. Precious metals have ongoing support from safe-haven demand, dovish Fed comments, and increased liquidity in the financial system. Strong central bank and fund demand are also supportive of precious metal prices.

Read more at Yahoo Finance: Dollar Pulls Back as US Manufacturing Activity Contracts