The dollar saw a slight uptick on Monday as investors awaited a series of central bank meetings, including the Bank of Japan’s potential shift away from negative interest rates and the Federal Reserve’s updated rate cut plans.

In addition to Japan and the United States, central banks in several other countries are scheduled to convene this week, including Britain, Australia, and Switzerland.

The dollar index, which measures the dollar against a basket of major currencies, showed a modest increase at 103.600, reflecting a year-to-date strengthening of over 2%. This rise comes amid positive U.S. economic performance, prompting investors to revise their expectations for aggressive rate cuts by the Federal Reserve.

Market data indicates that expectations for rate cuts in 2024 have been significantly reduced, with futures suggesting around a 51% probability of a rate cut by June.

All eyes are on the Federal Reserve’s meeting on Wednesday, where policymakers are expected to provide updated economic projections, particularly regarding rate cuts for the coming years. While the Fed previously projected 75 basis points of easing for 2024, analysts speculate that this forecast may be revised downwards to two cuts.

The Japanese yen remained relatively stable, reflecting the anticipation surrounding the Bank of Japan’s potential policy shift. Recent economic indicators and hints from BOJ members suggest a departure from ultra-loose monetary policy, although the timing remains uncertain.

In Europe, the euro and sterling saw marginal declines ahead of the Bank of England’s meeting on Thursday, where rates are expected to remain steady.

Australia’s central bank is also set to meet, with the Australian dollar showing a slight decline against the U.S. dollar in anticipation of the decision.

Investors are closely monitoring the Swiss National Bank’s meeting amid speculation of a possible interest rate cut, given inflation levels within its target range.

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