© Reuters. FILE PHOTO: Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. REUTERS/Florence Lo/Illustration/File Photo
By Herbert Lash and Harry Robertson
NEW YORK/LONDON (Reuters) -The dollar was little changed on Monday ahead of a slew of central bank meetings this week, with the Bank of Japan widely expected to end negative interest rates and the market waiting for the Federal Reserve’s latest projections for rate cuts.
In addition to Japan and the United States, central banks in Britain, Australia, Norway, Switzerland, Mexico, Taiwan, Brazil and Indonesia are all due to meet this week.
The , which measures the U.S. currency against six other major currencies, fell 0.029% at 103.430. It has risen about 2% this year as the U.S. economy has fared better than expected, leading investors to rein in bets that the Fed will cut rates quickly and deeply in 2024.
Markets are now pricing in just under three cuts of 25 basis points each by December, down from almost double that at the start of the year. Fed funds futures show around a 60% chance of the first rate cut coming by June, according to LSEG data.
The focus on Wednesday will be on whether Fed policymakers change their projections of rate cuts, or dot plots, for the year. The Fed in December projected 75 basis points of easing in 2024.
The Japanese yen traded little changed, up 0.09% at 149.21 per dollar.
The yen has had a whirlwind few weeks, weakening to 150.88 to the dollar last month. It then rebounded to a one-month high of 146.48 at the start of March, on the back of stronger than expected economic data and rising bets that the BOJ is preparing to end eight years of negative interest rates.
Bigger-than-expected pay hikes by major Japanese firms have cemented expectations that the BoJ will exit ultra-loose monetary policy, potentially as soon as at its meeting on Tuesday.
“If the BOJ is not going to move then the Bank has done a poor job of damping expectations,” said Colin Asher, senior economist at Japanese bank Mizuho in London. “Not moving now would likely spur more volatility than moving.”
The euro last bought $1.0893, up 0.05%, while sterling was at $1.2735, down 0.04% ahead of the Bank of England meeting on Thursday when the central bank is expected to hold rates at 5.25%.
Australia’s central bank is due to meet on Tuesday and is widely expected to hold rates steady. The Australian dollar rose 0.10% against the U.S. dollar to $0.657.
The U.S. dollar rose 0.09% against the Swiss franc. Some investors think the Swiss National Bank could cut interest rates on Thursday, with inflation having long been within its 0-2% target range.