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On Monday, the dollar attempted to maintain its gains amid anticipated central bank decisions in Japan and Europe, as well as shifting market expectations about potential US interest rate cuts. Trading remained relatively calm, except for the yen, which moved away from a one-month low on Friday, rising to 147.74 from 148.80. The yen had experienced a notable decline against the dollar this year, dropping approximately five percent, rebounding swiftly from its December rise to its highest levels in five months near 140.
The Bank of Japan commenced a two-day meeting on Monday. The prospects of a shift from an easy monetary policy have diminished in this meeting, partly due to the recent earthquake in western Japan and cautious comments from bank officials.
The dollar index dipped by 0.09 percent to 103.19 points, stabilizing against the euro at $1.0901.
The upcoming week holds significant events, including monetary policy meetings of the European Central Bank, and central banks of Canada and Turkey on Thursday, coupled with a busy corporate earnings season and disruptions in the Red Sea affecting global trade and supply chains.
Ahead of the ECB meeting, there has been a shift in the debate among policymakers, acknowledging the possibility of lowering borrowing costs in the future, but perhaps later and to a lesser extent than what markets currently anticipate. Market analysts expect the European Central Bank’s inflation forecasts to be off, predicting five interest rate cuts this year.
The pound sterling was last trading at $1.2716, showing a 0.12 percent increase during the day. The British pound experienced a decline last week after data on Friday revealed the sharpest drop in retail sales in three years. However, it received support from rising inflation rates and the belief that the Bank of England is likely to reduce interest rates at a slower pace compared to the European Central Bank or the Federal Reserve.
