Yen pressured as traders wait on policy decisions
By Tom Westbrook
SYDNEY (Reuters) — The dollar and euro made firm starts on Monday to a week full of central bank meetings, while the yen was struggling as investors expect the Bank of Japan will be the odd one out as policymakers hike rates in Europe and the United States.
The Federal Reserve concludes a meeting on Wednesday, followed by the European Central Bank a day later and the Bank of Japan on Friday.
The yen had dived on the dollar and crosses last week following a Reuters report that the Bank of Japan was leaning towards keeping its yield curve control policy unchanged, though volatility gauges have spiked as the meeting looms as a risk.
The yen was nursing losses at 141.71 to the dollar early on Monday and at 157.58 to the euro, it wasn't much above last week's 15-year low at 158.04, nor was it far from last week's record low on the Swiss franc.
The euro held at $1.1128 on Monday. The U.S. dollar index was steady at 101.04.
«The last week left markets believing in a soft-landing scenario for the U.S. markets where the (Fed) ends its hikes… and then sees a steady drop in CPI without a recession,» said Bob Savage, head of markets strategy at BNY Mellon (NYSE:BK).
«The ECB is also expected to be near the end with the German technical recession easing and growth holding elsewhere. The BOJ is seen talking about change but not doing much.»
The yen's Friday fall helped the dollar to gains on the Australian and New Zealand dollars and they were steady near recent lows early on Monday. The Aussie was testing support at its 200-day moving average at $0.6722.
The kiwi, which broke below its 200-dma on Friday, sat at $0.6172. It is under pressure as the central bank believes it is finished hiking rates and export prices
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