Asia FX Flat in Holiday-Thinned Trade; Aussie Rises on Labor Win

Most Asian currencies held steady in quiet trade on Monday, with market activity subdued by holidays in China, Japan, and several other countries. The Australian dollar stood out, firming after a decisive election win by the ruling Labor party.

The U.S. dollar edged lower, giving back some of last week’s gains after Friday’s robust jobs data reinforced the strength of the American labor market.

The Japanese yen firmed, with the USD/JPY slipping 0.5%, recovering from recent losses. The South Korean won weakened slightly, as the USD/KRW rose 0.1%. Singapore’s dollar edged higher, with the USD/SGD down 0.3%.

The Taiwan dollar surged, pushing the USD/TWD pair down 3.2% amid rising optimism over Taiwan’s economic outlook, buoyed by positive signals on U.S.-China trade.

China’s offshore yuan held steady, but remained near recent lows as traders assessed Beijing’s willingness to resume trade talks with Washington.

Aussie Dollar Gains on Political Clarity

The Australian dollar climbed 0.3% after Prime Minister Anthony Albanese secured a rare second term for Labor—Australia’s first in two decades. The win paves the way for extended fiscal support and social spending.

Treasurer Jim Chalmers said the new government will focus on shielding the domestic economy from global trade risks, a stance welcomed by markets. The Reserve Bank of Australia is widely expected to hold rates steady in its upcoming meeting, offering further support to the currency.

Dollar Eases as Trade Uncertainty Lingers

The dollar index slipped 0.3%, paring a 0.5% gain last week driven by strong U.S. payrolls. But gains were capped by lingering concerns over trade tensions, after President Trump said he had no immediate plans to engage with Chinese President Xi Jinping.

Trump indicated ongoing talks with several nations and hinted at possible future deals, but uncertainty around a U.S.-China resolution remains a key risk for global markets.