Dollar Rebound Triggers Yen Weakness Amid Rate Expectations

The US dollar rebounded on Monday, snapping its two-week losing streak against a basket of major currencies. The greenback's resurgence reflects growing expectations that the Federal Reserve may keep interest rates higher for longer than previously anticipated.

The dollar index, which measures the greenback against six major peers, climbed 0.3% to 104.50. This move comes ahead of key US economic data and central bank meetings, where traders are adjusting positions based on rate expectations.

The Japanese yen weakened, giving back some of its intervention gains made earlier this month. The currency had surged to a four-week high but is now under pressure due to Japan's ultra-low interest rates.

Analysts note that intervention alone may not reverse the yen's downtrend without a shift in monetary policy. 'Intervention can smooth volatility, but does not address the fundamental yield gap,' said one currency strategist.