Global Currency Movements Amid Fed and BOJ Speculations

Currencies like the yen, euro, and British pound experienced relative steadiness against the dollar, influenced by U.S. wholesale inflation data and Japanese economic growth. Analysts expect potential BOJ rate hikes, while Fed's anticipated rate cuts face dilemmas from inflation and labor market weaknesses. Market focus remains on monetary policies and economic indicators.

The dollar remained mostly stable against the euro and British pound on Friday as traders reassessed the likelihood of monetary easing by the U.S. Federal Reserve after unexpected wholesale inflation data. The Japanese yen strengthened, buoyed by robust economic growth data that surprised markets considering new U.S. tariffs.

The yen increased by 0.4% against the dollar and 0.3% against the euro and British pound. U.S. Treasury Secretary Scott Bessent suggested that the Bank of Japan might be "behind the curve" in managing inflation risks, bolstering the yen's appeal this week. Analysts predict that stronger GDP data could solidify expectations of a BOJ rate hike.

Despite high expectations for a 25-bps U.S. rate cut in September, recent producer price data tempered the possibility, altering market dynamics. The Fed, however, may still proceed with rate cuts, influenced by the Trump administration's encouragement. Analysts are closely watching for Fed Chair Jerome Powell's insights on economic conditions and interest rate paths.

(With inputs from agencies.)