USD Up Ahead of Key Central Bank Meetings Worldwide

The dollar rose higher on Monday as the world anticipates key decisions from central bank meetings across the United States, Japan, Britain, and other nations. This includes the Bank of Japan potentially ending its negative interest rates and the Federal Reserve’s rate cut projections.

The U.S. dollar index, a measure against six major currencies, increased 0.145% to 103.600, buoyed by a stronger-than-expected U.S. economy. This has led investors to expect less aggressive Federal Reserve rate cuts anticipated in 2024. 

Instead of nearly six cuts, the market now expects less than three 25 basis point reductions, with a 51% chance of the first cut happening by June, according to LSEG and CME Group’s FedWatch Tool. Additionally, the yield on 10-year Treasury notes reached a three-week peak, signaling market anticipation of sustained higher rates.

Speculation continues regarding the central banks of other nations, including potential rate decisions by the Bank of England and the Swiss National Bank, highlighting a week filled with critical monetary policy evaluations.
Read the full article at Reuters.