Currency Shifts as Global Policy Decisions Loom

Global currencies experienced significant shifts as investors anticipated key policy decisions from major central banks, including the Bank of Japan and the U.S. Federal Reserve. The yen hovered near a 2-1/2-month high, while the Australian dollar weakened. Investors are closely watching inflation data and geopolitical tensions, influencing market movements.

Global currencies saw notable fluctuations on Wednesday as investors prepared for crucial policy announcements, notably from the Bank of Japan (BOJ) and the U.S. Federal Reserve. The yen hit a 2-1/2-month peak with anticipations of BOJ tapering its extensive bond-buying program and hinting at future interest rate hikes.

The Australian dollar weakened to its lowest point since May, following a surprising drop in core inflation that diminished the likelihood of another rate hike. The yuan remained stable despite ongoing manufacturing slowdowns in China, suggesting potential economic stimulus measures ahead.

Meanwhile, broader market movements included inflation figures from France and the euro zone, alongside geopolitical tensions driving investor caution. With the Federal Reserve's decision pending, markets are pricing in potential rate cuts, which could significantly impact currency trajectories. Changes in the euro, sterling, and New Zealand dollar were also closely monitored.

(With inputs from agencies.)