(MENAFN) On Martin Luther King Day in the United States, the dollar demonstrated stability, with the risk-sensitive British pound experiencing a decline in anticipation of upcoming British economic data releases later in the week. The dollar index, gauging the US currency against a basket of six currencies, recorded a 0.13 percent increase, reaching 102.64.
Market sentiment appears to be tilting towards expectations of the US Federal Reserve implementing interest rate cuts commencing in March. This inclination gained momentum following Friday's surprising data revealing a decline in US producer prices for December. According to the CME Group's FeedWatch service, the current market expectation for interest rate cuts to commence in March stands at 70 percent, reflecting a slight increase from 68 percent the previous week.
The British pound exhibited a 0.27 percent decline against the dollar, settling at 1.2717. Despite this dip, it remained in proximity to its two-week peak reached the preceding week. Meanwhile, the euro maintained its position near the USD1.10 threshold, experiencing a marginal 0.08 percent decline to USD1.0941 in the latest trading.
The Japanese yen faced continued downward pressure, dropping by 0.63 percent to 145.83 against the dollar. This brings the yen close to its lowest level since mid-December. The anticipation revolves around expectations that the Bank of Japan is likely to sustain its monetary easing policy at the upcoming monetary policy meeting next week.
As global financial markets navigate various economic indicators and central bank policy expectations, the currency movements on Martin Luther King Day hint at underlying market dynamics, particularly in response to shifting interest rate sentiments and upcoming economic data releases.
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