The dollar remained stable on Monday as traders anticipated a week filled with central bank meetings worldwide, Reuters reported.
The Bank of Japan is expected to end negative rates, while the Federal Reserve’s rate cut projections are in focus.
Central banks in England, Australia, Norway, Switzerland, Mexico, Taiwan, Brazil, and Indonesia are also set to meet, with most likely maintaining current rates.
The BOJ is expected to announce the end of its negative interest rate policy, with preparations for this move already underway.
The Japanese yen softened slightly to 149.13 per dollar, following a recent high of 149.33. Speculation around the BOJ’s policy shift has led to a rise in the yen.
In the US, speculators hold a net short yen position of $8.66 billion, down from $11 billion earlier.
The BOJ may wait until April to make the policy change, with a 39 per cent chance of a rate increase on Tuesday. The Bank of Singapore’s chief economist expects the BOJ to remain dovish even if it ends negative rates.
Australia’s central bank is expected to keep rates steady, with potential rate cuts later in 2024. The Australian dollar and New Zealand dollar were stable.
The euro and sterling were also steady ahead of central bank meetings. The dollar index rose to its highest level since March 6.
The Fed is not expected to change interest rates, but strong US economic data has reduced expectations for future cuts. Traders are now pricing in 72 basis points of cuts this year, with a 58 per cent chance of the first cut in June. The focus is on the Fed’s projections for rate cuts, with potential for a less dovish outlook.
