The dollar maintained its stability on Monday amid increasing expectations for the Federal Reserve (U.S. central bank) to raise interest rates, despite news of reaching an agreement on the debt ceiling which deterred some hedgers from the U.S. currency. The dollar is on track to record monthly gains of about 3% against the yen.
The yen's recent decline against the dollar is attributed to rising yields on U.S. Treasury bonds, as bets increase on the likelihood of U.S. interest rates remaining elevated for a longer period.
The euro rose against the dollar by 0.02% to $1.0735, while the pound sterling fell by 0.01% to $1.23495.
Financial markets now predict a 62% chance that the Federal Reserve will raise interest rates by 25 basis points in June, compared to a 26% chance just a week ago, according to data from CME’s FedWatch.
