Dollar climbs

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SINGAPORE- The dollar inched broadly higher in cautious trade on Monday and held near 150 yen as traders looked to a policy decision by the Bank of Japan later in the week, alongside other major central bank meetings and a slew of economic data releases globally.

The BOJ kicks off its two-day monetary policy meeting on Monday, leading a week which will also see interest rate decisions from the US Federal Reserve and the Bank of England.

A PMI data deluge, inflation figures in the euro zone and US nonfarm payrolls also add to the mix of the event-packed week.

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“It’s definitely a busy week,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

“I think for the FOMC and the Bank of England, they will be pretty low key with them leaving interest rates on hold. The BOJ meeting will be the most interesting one (given) heightened speculation over a policy tweak at this meeting.”

The yen was last 0.1 percent  lower at 149.75 per dollar, getting a slight reprieve after having struck a one-year trough of 150.78 per dollar last week.

A recent surge in global interest rates has heightened pressure on the BOJ to change its bond yield control, as speculation mounts that the dovish central bank could hike its existing yield cap at this week’s meeting.

“Our base case remains that the BOJ will leave its monetary policy settings unchanged, although we acknowledge that there is a risk that they will announce tweaks to its yield curve control program,” said Kong.

In the broader market, currency moves were largely subdued as traders stayed on guard and risk sentiment remained fragile.

The Australian and New Zealand dollars nudged higher after having slid to fresh 2023 lows last week, with the Aussie last 0.19 percent  up at $0.6346.

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