Currency Fluctuations Amid Central Bank Decisions

The U.S. dollar strengthened while the yen weakened due to economic events and a Japanese earthquake. The Federal Reserve and other central banks are set to make policy decisions. The Fed is expected to cut interest rates, which may affect market expectations for future rate adjustments.

The U.S. dollar appreciated against various major currencies on Monday amid significant market movements. Investors are eagerly anticipating central bank meetings, particularly the Federal Reserve's, which is expected to announce an interest rate cut while indicating a cautious future easing cycle. Meanwhile, Japan faced a natural disaster that impacted the yen's value.

The Federal Open Market Committee is projected to announce a 25 basis-point reduction in the benchmark overnight rate, marking a third consecutive meeting for easing monetary policy. Analysts are watching for a 'hawkish cut', with debates likely among policymakers about future rate cuts due to differing economic outlooks.

The yen dropped sharply after an earthquake struck northeast Japan, causing tsunami warnings. This natural event could influence the Bank of Japan's upcoming decisions. Across Europe and other currency markets, movements are observed with potential hikes from central banks, while the euro faced slight declines despite earlier optimism from bond yield hikes.

(With inputs from agencies.)