Dollar Rises Amid Global Central Bank Speculations

The dollar strengthened slightly against major currencies as global markets anticipate monetary policy decisions from central banks in Britain, Europe, and Japan. The yen recovered some losses as the BOJ is expected to raise rates. UK inflation data suggests a rate cut by the Bank of England.

The dollar gained against major currencies on Thursday, driven by investors positioning ahead of pivotal central bank announcements from the UK, Europe, and Japan. The pound dropped following unexpected low UK inflation, bolstering the case for a Bank of England rate cut. Meanwhile, the yen recovered losses amid expectations of a significant rate hike from the Bank of Japan.

The euro and sterling both experienced declines, with the euro decreasing by 0.2% and sterling weakening following a prior 0.4% drop. Analysts anticipate a likely quarter-point rate cut from the BoE due to weak UK inflation data. The European Central Bank is expected to maintain its current rate strategy, indicating minimal appetite for adjustments.

While the Swedish and Norwegian central banks held rates steady, the BOJ is preparing to battle persistent inflation with rate increases. In the U.S., speculation continues about Fed leadership and future rate policies, with President Trump indicating a preference for lower rates as he considers Fed Chair successors.

(With inputs from agencies.)