The dollar declines before the release of US data, and the yen maintains its gains

The dollar fell today, ahead of the release of a set of economic data that will determine the course of interest rates, while the yen maintained its gains in the wake of Prime Minister Sanae Takaichi’s landslide election victory.

The pound sterling stabilized in the first hours of trading in Asia after Monday’s fluctuations, as investors assessed the crisis facing British Prime Minister Keir Starmer and increasing expectations for a cut in interest rates.

The price of the British pound reached 1.3682 to the dollar after rising by 0.6 percent in the previous session.

The yen exchange rate recorded 155.85 against the dollar, maintaining its gains last night when it rose by 0.8 percent.

Analysts expect the yen to weaken in the long term, noting that the spotlight will soon shine on Takaichi’s financial policies.

The Japanese currency has fallen by six percent since Takaichi assumed the presidency of the Liberal Democratic Party in October.

“With further easing in fiscal policy expected under a more aggressive Takaichi administration, I believe the dollar/yen will eventually resume its rise, and we still expect the dollar/yen to rise to 164 by the end of the year,” said Carol Kong, currency analyst at Commonwealth Bank of Australia.

The euro fell slightly to $1.19 after a 0.85 percent jump yesterday, Monday.

The dollar index, which measures the US currency against six major currencies, recorded 96.952, hovering near its lowest level in a week.

Analysts said media reports that China urged local banks to diversify their investments away from US Treasury bonds led to some weakness in the dollar.

Investors’ attention this week will focus on monthly reports on employment and consumer prices in the United States, which were delayed slightly due to the three-day government shutdown that recently ended.