On Monday, the US dollar strengthened against the yen but fell slightly against the rest of the world's major currencies.
This week, the markets will be closely following central bank meetings in Japan, the US, the UK, Australia, Norway, Switzerland, Mexico, Taiwan, Brazil, and Indonesia.
Therewith, traders will be paying special attention to the Bank of Japan, as stronger than expected wage increases by large Japanese companies have fueled expectations that the country's main financial regulator will announce the end of the negative interest rate policy.
These expectations caused the yen to fall 0.07% against the dollar to 149.12. At the same time, growing rumors that the Bank of Japan may abandon its ultra-loose monetary policy supported the yen, which rose to a one-month high of 146.48 per dollar earlier this month, Reuters reported.
Also, the possibility remains that the Bank of Japan will delay a decision on raising interest rates until April.
The Reserve Bank of Australia will hold a policy meeting on Tuesday. The central bank is expected to keep interest rates unchanged, but traders will be looking for comments that point to a rate cut before the end of 2024.
The Australian dollar rose 0.18% to 0.6572 against the US dollar, while the New Zealand dollar strengthened 0.31% to 0.6099 against the greenback.
The euro gained 0.06% to 1.0894 against the US dollar, while the British pound gained 0.05% to 1.2746.
The US Dollar Index (DXY), which tracks the greenback against a basket of global currencies, fell 0.05% to 103.39.
Currently, the CME FedWatch tool shows that markets are pricing in a 58% probability of a first rate cut in June.
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