Dollar, Yen Hold Steady Before Central Bank Meetings

30 Jul 2024 , 10:10 AM

The dollar and yen remained in close ranges on Tuesday as traders anticipated a slew of significant central bank announcements, beginning with midweek monetary policy meetings from the Bank of Japan and the Federal Reserve.

The Japanese yen was taking a breather from its recent climb as the BOJ began its two-day meeting on Tuesday, after rising more than 2% versus the dollar last week.

A number of factors have combined to help the yen recover from its 38-year low of 161.96 against the dollar at the beginning of the month, including a worldwide stock market crash and monetary policy expectations.

The BOJ has previously stated that it will disclose quantitative tightening (QT) plans, with the middle-of-the-road approach calling for the bank to gradually reduce its monthly bond purchases by half over the next two years.

However, economists are questioning whether the BOJ will raise interest rates on Wednesday, which would be Japan’s second hike this year, citing the central bank’s track record of underdelivering on aggressive market expectations.

Markets are currently pricing in a 63% possibility of a 10-basis point raise.

The dollar was last up 0.12%, trading at 154.205 against the yen.

The dollar index, which measures the currency against a basket of peers, remained relatively unchanged at 104.64.

Sterling was last trading at $1.28495, down 0.08% for the day. The euro remained practically unchanged at $1.0816.

The Australian dollar slipped 0.05% against the greenback to $0.6546.

The New Zealand Dollar remained relatively unchanged at $0.5876. Bitcoin recently declined 0.77% to $66,843.53.

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