The U.S. dollar remained under pressure on Monday, extending losses near a two-month low, while the euro and British pound held relatively steady as investors awaited a series of critical central bank decisions this week. Currency markets were largely rangebound during early Asian trading, reflecting cautious sentiment ahead of major economic events, including U.S. inflation data and the highly anticipated nonfarm payrolls report.
The Japanese yen was little changed after a key Bank of Japan survey showed that business sentiment among large manufacturers rose to a four-year high. Despite the positive data, the yen slipped 0.1% to 155.94 per dollar. The survey reinforced expectations that the Bank of Japan may raise interest rates later this week, marking a potential shift in Japan’s long-standing ultra-loose monetary policy. Market participants are closely watching Governor Kazuo Ueda’s guidance for clues on the future pace of rate hikes. Analysts at Societe Generale expect the BOJ to raise rates this week and forecast the policy rate could reach 1% by July next year, followed by gradual and cautious tightening.
Attention is also firmly on Europe, with rate decisions from the Bank of England and the European Central Bank scheduled. Markets have largely priced in a Bank of England rate cut as UK inflation shows signs of easing, though upcoming inflation data could still influence expectations. Sterling dipped 0.17% to $1.3359, while the euro edged down 0.09% to $1.1730. The ECB is widely expected to keep rates unchanged, although traders have begun speculating about a possible rate hike in 2026.
In the United States, investors are preparing for a wave of delayed economic data following a historic government shutdown. The November jobs report and inflation figures are expected to provide fresh insight into the health of the U.S. economy. The dollar index stood at 98.43, struggling to regain momentum after last week’s decline.
Meanwhile, the Australian dollar slipped slightly to $0.6647, while the New Zealand dollar edged higher to $0.5807. The Federal Reserve’s recent 25-basis-point rate cut and cautious guidance from Chair Jerome Powell continue to shape global currency trends as markets head toward year-end.


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