The Australian dollar fell against most currencies on Monday, while the US greenback rallied against its peers, amid concerns about the monetary policies around the world, which weighed down on investors' risk appetite in assets such as commodity currencies and stocks.

Bear in mind that the Fed's interest rate hike means increased borrowing costs for companies, which push their shares down.

St. Louis Federal Reserve President James Bullard said that Fed could raise interest rates as soon as March, which is sooner than expected.

Efforts to contain the coronavirus continue in many countries around the world, as governments avoid re-imposing lockdown restrictions to not harm their economies.

Pfizer CEO, Albert Bourla, said that he expects to have a vaccine that targets the omicron variant ready by next March.

As of 17:13 GMT, AUD/USD fell 0.1% to 0.7169, and hit an intraday high at 0.7203 and a low at 0.7148.

US stock indices fell sharply in early trading on Monday, due to growing odds of an interest rate hike by the Federal Reserve.

The Federal Reserve meeting minutes showed Fed officials are preparing to move quicker in raising interest rate than expected.

Bear in mind that the Fed's interest rate hike means increased borrowing costs for companies, which push their shares down.

St. Louis Federal Reserve President James Bullard said that Fed could raise interest rates as soon as March, which is sooner than expected.

The 10-year US Treasury bond yield rose to 1.8%, which weighs down on stock markets.

As for stocks, Dow Jones fell 1.4% or 520 points to 35,712 as of 15:27 GMT, and S&P 500 fell 1.7% or 81 points to 4,595, while Nasdaq fell 2.2% or 336 points to 14,599.

Euro declined in European trade against dollar, resuming the losses after a hiatus on Friday even as European inflation hits historic highs, as investors expect a US rate hike in March.

EUR/USD fell 0.2% to 1.1320, with an intraday high at 1.1360, after closing up 0.6% on Friday after data showed record inflation in Europe.

European consumer prices spiked 5% in December, the fastest such pace on record, increasing inflationary pressures on the European Central Bank. 

However, the central bank in Europe still doesn't believe it faces inflationary risks like other countries, insisting on maintaining its current ultra easy policies.

The dollar index rose 0.3% on Monday, recouping the losses on Friday against a basket of major rivals.

The gains came amid expectations of increasing inflation in the US to new record highs, bolstering the case for a March rate hike.

US stock indices fell on Friday, after the release of a mixed jobs report, and Wall Street posted weekly losses.

The US Department of Labor reported that the economy has added 199K new jobs in December, less than forecasts of 430K jobs, while the unemployment rate fell to 3.9% from 4.2%.

The 10-year US Treasury bond yield rose to 1.75%, which weighs down on the stock, commodity and metal markets.

The Federal Reserve meeting minutes showed Fed officials are preparing to move quicker in raising interest rate than expected.

St. Louis Federal Reserve President James Bullard said that Fed could raise interest rates as soon as March, which is sooner than expected.

To the oil market, WTI crude February futures rose fell 0.7% or 56 cents, and closed at $78.90 a barrel, and posted a weekly gain of 5%.

Brent March futures fell 0.3% or 24 cents, and closed at $81.75 a barrel, with a weekly of 5.1%.

As for stocks, Dow Jones fell 0.1% or 5 points, and closed at 36,231, and posted a weekly loss of 0.3%, with a day high of 36,382, and a low of 36,111.

S&P 500 fell 0.4% or 19 points to 4,677 and posted a weekly loss of 1.9%, after hitting a high of 4,707 and a low of 4,662 points.

Nasdaq fell 0.9% or 145 points to 14,936, and registered a 4.5% weekly loss, with a high of 15,171 and a low of 14,877.