The U.S. dollar remained stable against major currencies on Thursday as traders anticipated key economic data. Federal Reserve Governor Christopher Waller indicated that the central bank was not inclined to lower interest rates due to persistent inflation.
The Japanese yen maintained its position near the 152 mark after Japan's monetary officials hinted at potential intervention to curb further declines. Waller's comments suggested that the Fed was concerned about inflation and might reconsider its plans for rate cuts.
Market expectations for a rate cut at the Fed's June meeting have diminished, with current pricing indicating a 60% probability compared to 67% last week. Analysts believe that a strong inflation reading on Friday could challenge the market's anticipation of three rate cuts in 2024.
Traders are eagerly awaiting U.S. core inflation data and a speech by Fed Chair Jerome Powell. The dollar index, which measures the greenback's value against a basket of currencies, rose slightly after Waller's remarks but later retreated.
The yen traded within a narrow range around 151.34 per dollar, having reached a low of 151.975 on Wednesday. Japanese authorities have warned against further weakness in the currency and may intervene if it approaches 152 yen per dollar.
China's central bank set the yuan fixing at a significant deviation from market estimates, signaling efforts to prevent a sharp decline in the currency. The yuan remained relatively stable, while other currencies, such as the kiwi dollar, the Aussie, the euro, and sterling, exhibited minor fluctuations.