ALBAWABA - The dollar remained stable on Monday, January 8th, ahead of a crucial announcement of US inflation data later in the week, which will provide further insights into the Federal Reserve's monetary policy expectations. The markets started the week cautiously, with reduced bets on interest rate cuts.
Trading was subdued in Asia due to a public holiday in Japan.
The dollar rose 0.05% against the yen to 144.67, continuing its gains from the previous week when it jumped 2.6% against the Japanese currency, marking its best weekly performance since June 2022. The New Zealand dollar also edged up 0.1% to $0.6248 after a 1.2% decline in the previous week. The dollar index remained steady at 102.38.
The dollar received support from the recovery in US Treasury bond yields, as traders adjusted their expectations for the pace and extent of US interest rate cuts this year.
However, the upcoming US inflation reading, scheduled to be announced on Thursday, may change these views once again. Friday's data revealed that employers in the United States hired more workers than expected in December, while wages increased strongly, indicating a labor market that remains robust and resilient.
As for other currencies, the British pound increased by 0.02% to $1.2721, while the euro rose 0.08% to $1.0948 after a 0.9% decline in the previous week.
The Australian dollar also climbed 0.1% to $0.6721, recovering some of its losses from the previous week when it fell 1.5%.
