Dollar Strengthens as Fed and BOJ Decisions Loom

The US dollar strengthened on Monday as global currency markets entered a crucial week of central-bank decisions. The Federal Reserve and Bank of Japan are expected to make key policy announcements, with investors weighing the prospect of higher interest rates.

Meanwhile, the yen remained close to a seven-month high against the dollar, reflecting growing expectations that the BOJ could accelerate the pace of monetary tightening. The currency has gained about 4% this month as traders increasingly position for further Japanese rate increases and possible repatriation of overseas assets by domestic investors.

The surge in energy prices has complicated the outlook for monetary policy worldwide. Brent crude futures climbed nearly 3% to about $107.60 a barrel after new Houthi strikes on Saudi Arabia and Iranian attacks on vessels in the Gulf heightened fears over supplies.