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Yen retreats; Dollar awaits CPI

Yen retreats, Dollar awaits CPI

Recent developments sent the yen lower as traders adjusted to expectations of a possible rate hike in Japan, while the dollar held steady in anticipation of key U.S. data. inflation and several central bank meetings Notably, the dollar rose about 0.9% overnight against the yen to 145.96 yen—up 3% from last week’s low —Bank of Japan (BOJ) officials expressed a lack of urgency to move away from negative interest rates, reversing the rising appreciation of the yen, the Japanese stock market and government bonds -The markets also contributed to both gains.

Regarding the prevailing economic climate, Commonwealth Bank of Australia analyst Christina Clifton highlighted continued weak wages and estimated that the BOJ may maintain negative interest rates until at least Q2 2024. Meanwhile, other currency pairs remained relatively stable, with the euro at $1.0765. Market attention shifted to the US. inflation data will be released on Wednesday at 1330 GMT, focusing on the Federal Reserve’s policy decision. Sterling hit $1.2555, with the Australian dollar at $0.6564 and the New Zealand dollar at $0.6122 on the fourteenth anniversary on Tuesday.

The dollar has fallen from October’s benign U.S. index. inflation report but received support after upbeat jobs data released on Friday. The Federal Reserve is expected to hold interest rates between 5.25% and 5.50% this week. The focus is now on the dot plot, which shows future rate projections, and Chairman Jerome Powell’s press conference. However, a rate cut is expected in March.

Read also: RBI Sells USD to Support Rupee

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Karla brings over 16+ years of experience in the online brokerage industry. She is a finance graduate from Birmingham University, UK, and a forex market enthusiast. Being a true writing fanatic, she pens research-backed reviews for traders to analyse trading strategies and indicators. She has also authored a wide range of educational articles covering the forex industry. Karla is quite interested in checking brokerage companies and studying their performance and growth. Her aim is to describe complex investment mechanisms in an accessible way for traders of any level. Apart from finance, her interests mainly include reading books, fitness, and writing in her journal. Karla believes in the power of writing and wants to write for every layman who knows nothing about finance.
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