In the world of currencies, the US dollar continues to face pressure as investors react to a range of factors. Over the weekend, Japan’s ruling party, the LDP, secured a historic win, which has contributed to a weakening of the USDJPY pair. However, flows have been relatively muted, with the pair now trading in a neutral range.

Meanwhile, the broader dollar is facing pressure following reports that China has urged domestic banks to reduce their exposure to US Treasuries due to market-related risks. This has led to a wave of selling at the start of the London session, with the US dollar falling against a range of its major peers.

Against this backdrop, there has been buying interest in the Australian dollar, particularly against the US dollar (AUDUSD) and New Zealand dollar (AUDNZD). Flows are two-way in gold (XAU), with some investors taking profits alongside fresh buying.

In other developments, the UK continues to face a backdrop of political turmoil, which has translated into option interest on both the upside and downside of the pound (EURGBP). However, the focus remains on the US dollar, as investors weigh the implications of China’s move to reduce its holdings of US Treasuries.