The dollar is trying to hold on to its gains while awaiting central bank meetings

The US dollar is struggling to maintain its gains during early Monday trading, as anticipated central bank decisions in Japan and Europe and fluctuating market expectations about cutting US interest rates halted its data-driven rise late last week.

The yen was the notable exception in otherwise calm trading, and the Japanese currency moved away from its lowest level in one month on Friday at 148.80 and rose to 147.74. The yen fell the most against the dollar this year, falling about five percent in a rapid rebound from its rise in December to its highest levels in five months near 140.

The Bank of Japan (the Central Bank) begins a two-day meeting on Monday. The bets on shifting from an easy monetary policy declined at this meeting in the wake of the earthquake that struck the western coast of Japan on the first day of the new year, in addition to the cautious comments of bank officials.

The dollar index fell by 0.09 percent to 103.19 points and stabilized against the euro at $1.0901.

The markets are anticipating a lot of things this week, as the monetary policy meetings of the European Central Bank and the central banks of Canada and Turkey will be held on Thursday, in addition to the busy corporate results announcement season and the turmoil in the Red Sea that has affected global trade and supply chains.

Ahead of the ECB meeting, the debate has changed to some degree as policymakers accept that the next step is to lower borrowing costs, but later and less than markets expect.

Market analysts believe the European Central Bank's inflation forecasts are wrong and expect five interest rate cuts this year.

The pound sterling was last trading at $1.2716, up 0.12 percent during the day. The pound sterling fell last week after data on Friday showed that retail sales fell the most in three years. The currency received support from the continued rise in inflation rates and the belief that the Bank of England will likely not reduce interest rates at the same speed as the European Central Bank or the Federal Reserve (US Central Bank).