On Monday, the dollar remained stable as most major Asian markets were closed for a holiday, delaying the start of what could be a busy week. Attention is now turned towards US inflation data in search of clues about when the Federal Reserve (the US central bank) may begin lowering interest rates.
The euro slightly declined to $1.0778, moving away from its highest level in ten days that it reached in early trading. This comes after a slight recovery last week following persistent declines since the beginning of 2024.
The economic growth data for the eurozone in the fourth quarter of the year, which will be released on Wednesday, is expected to show a new trend.
The British pound settled at $1.2632.
The yen slightly rose to 149.04 against the dollar after limiting movements ahead of the release of the US Consumer Price Index data in January on Tuesday.
Data released earlier this month indicated a strong performance in employment activity, raising the likelihood that the Federal Reserve may reduce interest rates in March. However, current market speculations suggest that this move may occur in May.
Analysts expect the US consumer price index to record a 0.3 percent monthly increase in January, but it will remain high on an annual basis at 3.8 percent.
Similarly, the release of consumer price index data in Britain on Wednesday is expected to indicate the trends regarding the timing of the Bank of England’s interest rate reduction.
The Japanese yen, which is greatly affected by interest rates, is also being closely watched by the markets. It saw a significant increase towards the end of last year as the markets expected a soon-to-be decrease in US interest rates. However, it has since declined due to expectations of a delay in the rate cut. (Reuters)
