The US dollar held broad gains in Asia on Monday as investors looked ahead to higher interest rates from the Federal Reserve, while gold slumped to five-year lows as a lack of global inflation left little to hedge against.
The precious metal XAU= ran into a wave of selling in Asia that drove it down 3.9 percent to USD 1,089.80 an ounce, having already suffered its worst weekly performance since March last week.
Activity was light elsewhere with Japan on holiday and a dearth of major data in the diary, leading to a cautious start for stocks.
Australia's main index .AXJO was a fraction softer, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was all but flat.
There was better news from China where home prices rose for a second month in a row in June, suggesting government efforts to boost the struggling property sector have started to gain traction.
China stocks seem to have pulled out of their recent nosedive amid a barrage of measures from regulators and buying by brokerages and mutual funds.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.1 percent, while the Shanghai Composite Index eased 0.2 percent.
Greek banks are set to reopen on Monday after a three-week shutdown, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.
With Greece fading from the limelight, markets focused on the relative outperformance of the US economy and nudged the euro near to its lowest in seven weeks at USD 1.0826.
A break of the May trough around USD 1.0818/19 would likely embolden bears to head for the April lows at USD 1.0521.
"For now, with an agreement on the cards and Greece currently adhering to creditors' demands, it appears markets can move on and focus on other things," say analysts at ANZ.
"Solid US data and further easing of global market stresses has driven expectations that the Fed could start to normalize rates this year."
That helped the dollar up to 124.13 yen, near its highest in around three weeks, while the dollar index of 97.991 .DXY is on ground last visited in April.
In commodity markets, oil was burdened by the prospect of increased exports from Iran now a deal has been struck to ease sanctions on the country.
Brent crude LCOc1 was off 15 cents on Monday at USD 56.95 a barrel, while US crude CLc1 fell 9 cents to USD 50.80.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
