The dollar index was at the 104 mark on Wednesday, remaining close to the six-month low of 103.75 touched on December 14th and holding losses from the week after BOJ unexpectedly widened raised the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25% boosting the yen. The BOJ’s move came sooner than expected, reflecting ongoing pressure from major central banks to tighten monetary policy and support their local currencies. Meanwhile, investors hope that an upcoming recession could keep the Federal Reserve from holding interest rates at higher levels. During its December meeting, the Fed raised interest rate by a more moderate 50 basis points but indicated that the terminal rate could reach 5.1% next year, higher than markets anticipated.
