Investors anticipate dollar's initial weekly decline in 2024

(MENAFN) Investors are bracing for the dollar's first weekly decline in 2024 as market sentiment adjusts in response to evolving expectations regarding Federal Reserve interest rate policies. A recent shift away from anticipations of imminent rate cuts has bolstered the US currency, prompting a momentary pause in its upward trajectory.

Conversely, the Japanese yen has experienced weakness, marking its fourth consecutive weekly decline as investors pursue higher yields elsewhere. With interest rates in Japan expected to remain near zero for the foreseeable future, investors are drawn to opportunities offering better returns in other markets.

The dollar's resurgence this year can be attributed to robust economic indicators and cautionary remarks from Federal Reserve officials regarding lingering inflationary pressures. These factors have tempered expectations of imminent rate cuts, with market participants now speculating that any adjustments to interest rates may be postponed until at least June or later in the year.

Despite a modest uptick, the dollar index edged marginally higher to 103.96 points in the latest trading session. Nonetheless, it is on track to register its first weekly decline since December, signaling a potential shift in the prevailing trend.

Meanwhile, the euro maintained a steady position in recent trading, settling at USD1.0823 against the dollar. As market dynamics continue to evolve, investors remain attuned to signals from central banks and economic indicators, which are likely to shape the trajectory of currency markets in the coming weeks.

MENAFN25022024000045015682ID1107896222