Dollar holds steady, Yen softens ahead of potential BOJ policy shift- Republic World

Dollar remains steady: The dollar maintained its stability on Monday as traders anticipated a week filled with central bank meetings worldwide. 

Of particular interest is the Bank of Japan (BOJ), which appears poised to abandon negative rates, while attention also remains on the Federal Reserve’s projections for rate cuts.

Aside from Japan and the United States, central banks in England, Australia, Norway, Switzerland, Mexico, Brazil, and Indonesia are scheduled to meet, with most expected to maintain current interest rates.

The focus in Asia is on the BOJ, as major pay raises by major Japanese firms have solidified expectations for the central bank to end its negative interest rate policy, possibly as early as this week.

Despite weakening slightly against the dollar to its lowest level in over a week, the Japanese yen remains up for the month. 

ANZ’s senior international economist predicts a dovish hike by the BOJ, potentially raising the policy rate from -0.1 per cent to 0.0 per cent.

While there’s speculation that the BOJ might delay its move until April, markets currently indicate a 39 per cent chance of action on Tuesday.

Beyond Japan, Australia’s central bank is expected to keep rates steady, with the Australian dollar holding near a week low. Similarly, the New Zealand dollar saw modest gains.

The euro and the sterling were slightly down against the dollar, with the Bank of England expected to maintain rates at its Thursday meeting.

The dollar index, which measures the dollar against six major currencies, edged up ahead of the Fed’s meeting, despite expectations of no rate changes. 

Traders are closely watching for any adjustments to the Fed’s projections on future rate cuts.

Cryptocurrencies experienced a slight decline, with bitcoin and ether both trading lower after reaching record highs last week.

(With Reuters Inputs)