Dollar Strengthens Amid Central Bank Decisions

The dollar maintained its strength against major currencies as markets anticipated key central bank decisions in the UK, EU, and Japan. The UK's unexpected inflation drop hints at a potential BoE rate cut, while the BoJ is likely to hike rates, affecting both the yen and international markets.

The dollar continued to exhibit strength on Thursday against key currencies, as markets braced for significant central bank announcements from Britain, Europe, and Japan. In the UK, sterling continued to counter downward pressure following a surprising dip in inflation that could justify a Bank of England interest rate cut.

Japan's yen minimized its losses amid expectations of a rate hike by the Bank of Japan, which could elevate policy rates to a three-decade peak. The dollar index registered minimal changes at 98.35, following earlier gains against currencies like the yen and euro.

Elsewhere, the markets factored in a 100% chance of the BoE lowering rates due to weak inflation data, while the European Central Bank is expected to maintain its current rates. In the US, differing views within the Federal Reserve add uncertainty to future rate cuts.

(With inputs from agencies.)