Inflation dents rate cut expectations, keeping the dollar steady.

On Monday, the dollar remained stable despite data indicating that U.S. inflation remained stubbornly high, which caused uncertainty about when the Federal Reserve would begin its easing cycle. Meanwhile, the yen remained close to the psychologically significant 150 per dollar level.

Japanese authorities have kept a watchful eye on the yen's recent fluctuations, which have remained around the 150 level, prompting officials to comment on currency movements and keeping markets on high alert for possible intervention.

On Monday, the dollar strengthened by 0.20% to 149.94 per dollar, but it is still down 6% for the year. Meanwhile, the dollar hovered around three-month lows of 161.925 against the yen.

Marc Chandler, chief market strategist at Bannockburn Global Forex, stated that Ministry of Finance officials "initiated the first step on the intervention escalation ladder by cautioning against hasty actions and threatening to take action beyond their time zone."

According to Chandler, the charts show little that would prevent a test from reaching the low of 152 per dollar from last year.

On Monday, U.S. markets will be closed for the Presidents' Day holiday, and trading volumes are expected to be low throughout the day.

The index, which compares the U.S. currency to six major competitors, began the week with a 0.058% decline to 104.14 after five consecutive weeks of increases. Despite this, the index has risen by 3% so far this year.

In January, both U.S. producer and consumer prices increased more than anticipated, according to data from last week. This unexpected rise in inflation, which seems to be sticking, has increased the likelihood of a delayed start to the Fed's rate cuts.

The CME FedWatch tool revealed that traders are now predicting that June will be the beginning of the easing cycle, compared to March at the start of the year.

This year, markets have only taken out two quarter point rate cuts, implying less than 100 basis points of easing, compared with the 150 basis points of cuts expected at the start of the year.

Citi strategists confirmed last week that an economic soft landing has not been achieved and "make us more convinced that one will not be." They pointed to declining retail sales and the continuing rise in jobless claims as evidence of a softening economy in a note.

A recession becomes more likely when the Fed is unable to lower rates due to high inflation.

This week, the Fed meeting minutes from last month will be the focus of investor attention, with their release scheduled for Wednesday. Additionally, several Fed officials, including Christopher Waller and Raphael Bostic, are scheduled to speak this week.

OCBC's currency strategist, Christopher Wong, believes that the majority of the hawkish adjustments in the market have already occurred and anticipates the dollar to remain stable without any new catalysts.

On the day, the  was up 0.12% at $1.0787, while the  was last at $1.2624, up 0.21%.

Despite UK retail sales growing at their fastest pace in nearly three years in January, the Bank of England's monetary policy outlook remained unchanged.

Markets still anticipate 64 basis points of cuts from the BOE this year.

While the advanced rose 0.34% to $0.614, the rose increased by 0.29% to $0.655.