By Daniel Wiessner

(Reuters) -Civil rights groups filed a lawsuit on Tuesday challenging a new Republican-backed law in Texas that will give state officials broad powers to arrest, prosecute, and deport people who illegally cross the U.S.-Mexico border.

The lawsuit filed in federal court in Austin, Texas, claims that the law signed by Republican Texas Governor Greg Abbott on Monday unlawfully infringes upon the authority of the federal government under the U.S. Constitution to enforce the nation’s immigration laws.

The groups, led by the American Civil Liberties Union (ACLU), also said the law, which takes effect in March, illegally bars migrants from applying to the U.S. government for asylum or other humanitarian protections.

The law, known as SB4, makes it a state crime to illegally enter or re-enter Texas from a foreign country and gives state and local law enforcement authorities the power to arrest and prosecute violators. It also allows state judges to order that individuals be deported, with up to 20-year prison sentences for migrants who refuse to comply.

The Republican-controlled Texas legislature passed the measure in November.

Abbott’s office and the office of Texas Attorney General Ken Paxton did not immediately respond to requests for comment.

Adriana Pinon, legal director of the ACLU’s Texas chapter, said the law was one of the most extreme immigration enforcement measures taken by a U.S. state and would lead to racial profiling of minorities by police.

“The bill overrides bedrock constitutional principles and flouts federal immigration law while harming Texans, in particular Brown and Black communities,” Pinon said in a statement.

The ACLU is representing two Texas-based immigrant advocacy groups and El Paso County, Texas in the lawsuit. The county says it will see up to 8,000 additional arrests per year as a result of the law, at a cost of $24 million. The new law also will interfere with the county’s policy of only incarcerating people who pose a high risk to public safety, according to the complaint.

Abbott on Monday said the law was necessary because of the failure of Democratic President Joe Biden’s administration to stem a spike in illegal migration.

Stephen Yale-Loehr, a professor of immigration law at Cornell Law School, said before the lawsuit was filed that the Texas law was vulnerable to legal challenges. Yale-Loehr cited a 2012 U.S. Supreme Court ruling that said Arizona could not authorize state officials to arrest and prosecute people for being in the United States illegally, because that was the exclusive province of the federal government.

Paxton, a Republican, told state lawmakers during a hearing in March that the 2012 decision “didn’t make a lot of sense” and that passing SB4 could give the Supreme Court’s conservative majority a chance to revisit the ruling.

Texas is already embroiled in a series of court cases related to Abbott’s efforts to deter and punish illegal border crossings, collectively known as Operation Lone Star.

On Tuesday, a U.S. appeals court temporarily blocked the Biden administration from destroying razor wire fencing that Texas placed along its border with Mexico to deter illegal border crossings.

Earlier this month, the same court upheld a judge’s ruling requiring Texas to remove a 1,000-foot-long (305-meter) floating barrier it placed in the Rio Grande river.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi, Will Dunham, Rosalba O’Brien, Aurora Ellis and David Gregorio)

SHANGHAI/SINGAPORE (Reuters) – China stood pat on benchmark lending rates at the monthly fixing on Wednesday, matching market expectations, after the central bank kept its medium-term policy rate steady earlier last week.

But market watchers continued to expect Beijing to deliver further monetary easing into the new year to support a sputtering economic recovery as deflationary pressure push up real borrowing costs.

The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 4.20%.

Most new and outstanding loans in the world’s second-largest economy are based on the one-year LPR, which stands at 3.45%. It was lowered twice by a total of 20 basis points in 2023.

The five-year rate influences the pricing of mortgages and is 4.20% now. It was lowered by 10 basis points so far this year.

In a Reuters survey of 28 market watchers conducted this week, all participants predicted no change in either the one-year or five-year LPR.

The steady fixings came after the central bank kept its medium-term policy rate unchanged, and the one-year LPR is loosely pegged to the medium-term lending facility (MLF) rate.

Market participants typically see changes in the MLF as a precursor to changes in the LPR.

The People’s Bank of China (PBOC) ramped up liquidity injections through medium-term policy loans last week, while keeping the interest rate unchanged.

The central bank injected a net 800 billion yuan ($112.22 billion) of fresh funds into the banking system through medium-term lending facility (MLF) loans, booking the biggest monthly increase on record.

“Although the PBOC avoided a reserve requirement ratio (RRR) cut in December and injected net liquidity at a record high … we still look for 20 basis points of rate cuts and 50 basis points of RRR cuts next year,” said Serena Zhou, senior China economist at Mizuho Securities.

“Furthermore, we expect the PBOC to prioritise guiding lower deposit rates rather than loan prime rates, considering the tight interest margins for most Chinese banks.”

Separately, some analysts said policymakers may need some time to evaluate the effects of recent fiscal support and renewed efforts to revive the sluggish property market.

“The most recent push for lower spreads which allows commercial banks to charge less for new housing loans in tier-one Shanghai and Beijing has yet to be fully felt and warrants observation before more aggressive declines in the reference rate,” said Bob Savage, head of markets strategy and insights at BNY Mellon Capital Markets.

The LPR, which banks normally charge their best clients, is set by 18 designated commercial banks who submit proposed rates to the central bank every month.

($1 = 7.1287 Chinese yuan)

(Reporting by Winni Zhou and Tom Westbrook; Editing by Sam Holmes)

By Brigid Riley

TOKYO (Reuters) – The U.S. dollar slipped against most major currencies on Wednesday as traders continued to sell the currency on bets that the U.S. Federal Reserve will soon begin cutting interest rates, ahead of inflation data later this week.

The exception was the yen, against which the dollar held firm after the Bank of Japan was mum on an end to its ultra-loose monetary policy the previous day.

Fed officials have been pushing back after last week’s Federal Open Market Committee meeting saw three rate cuts penciled in for 2024, sparking a rally in financial markets.

Market participants are currently pricing in a 67.5% chance of the first rate cut happening at the Fed’s March meeting, according to the CME FedWatch tool.

“The proverbial genie is out of the bottle now, and the Fed either has to accept that and risk easing policy prematurely or push back very hard and cause a bit of volatility in the markets,” said Kyle Rodda, senior financial market analyst at Capital.com.

While Atlanta Federal Reserve President Raphael Bostic on Tuesday repeated on Tuesday that he expects two rate cuts likely in the second half of the year, he added that there is no “urgency” now.

On the same day, Richmond Fed President Thomas Barkin said whether the central bank can deliver on forecasts of rate cuts depends on how the economy performs.

The dollar index was last mostly flat at 102.20 after sliding more than 0.3% on Tuesday and hitting a four-month low of 101.76 last week.

In the end, the dollar’s movement will depend on economic data supporting the rate cuts that have been priced in, said Rodda.

“The U.S. dollar is the inverse of the so-called ‘everything rally,’ which will beat on if the data confirms the need for cuts next year,” he said.

The Fed’s preferred measure of underlying inflation, the core Personal Consumption Expenditures (PCE) price index, is due this week, and may provide clarity on whether inflation has slowed enough for the Fed to begin easing policy next year.

Meanwhile, the dollar had the yen pinned lower at 143.78 yen, after the Japanese currency fell to as low as 144.95 the previous day.

The yen had been trading around the low 142 range on Tuesday before the Bank of Japan announced its monetary policy decision, and weakened further after the Japanese central bank’s chief Kazuo Ueda gave no hints on an imminent end to negative interest rates.

Ueda’s “lack of ‘hawkishness’ should reinforce the perceptions next April is the earliest likeliest date for a policy shift,” National Bank of Australia’s Senior FX Strategist Rodrigo Catril said in a note.

Elsewhere, the euro held firm at $1.0973, while sterling was last trading at $1.2724 after making gains on a weaker dollar on Tuesday.

In cryptocurrencies, bitcoin last up 0.44% at $42,446.00.

(Reporting by Brigid Riley; Editing by Sonali Paul)

By David Shepardson

WASHINGTON (Reuters) – The Biden administration said on Tuesday it was taking the first step toward writing key standards and guidance for the safe deployment of generative artificial intelligence and how to test and safeguard systems.

The Commerce Department’s National Institute of Standards and Technology (NIST) said it was seeking public input by Feb. 2 for conducting key testing crucial to ensuring the safety of AI systems.

Commerce Secretary Gina Raimondo said the effort was prompted by President Joe Biden’s October executive order on AI and aimed at developing “industry standards around AI safety, security, and trust that will enable America to continue leading the world in the responsible development and use of this rapidly evolving technology.”

The agency is developing guidelines for evaluating AI, facilitating development of standards and provide testing environments for evaluating AI systems. The request seeks input from AI companies and the public on generative AI risk management and reducing risks of AI-generated misinformation.

Generative AI – which can create text, photos and videos in response to open-ended prompts – in recent months has spurred excitement as well as fears it could make some jobs obsolete, upend elections and potentially overpower humans and catastrophic effects.

Biden’s order directed agencies to set standards for that testing and address related chemical, biological, radiological, nuclear, and cybersecurity risks.

NIST is working on setting guidelines for testing, including where so-called “red-teaming” would be most beneficial for AI risk assessment and management and setting best practices for doing so.

External red-teaming has been used for years in cybersecurity to identify new risks, with the term referring to U.S. Cold War simulations where the enemy was termed the “red team.”

In August, the first-ever U.S. public assessment “red-teaming” event was held during a major cybersecurity conference and organized by AI Village, SeedAI, Humane Intelligence.

Thousands of participants tried to see if they “could make the systems produce undesirable outputs or otherwise fail, with the goal of better understanding the risks that these systems present,” the White House said.

The event “demonstrated how external red-teaming can be an effective tool to identify novel AI risks,” it added.

(Reporting by David Shepardson; Editing by Jamie Freed)

By Stephen Culp

NEW YORK (Reuters) – Wall Street extended its rally on Tuesday, advancing on the day as last week’s dovish policy pivot from the Federal Reserve continued to reverberate and investors looked ahead to crucial inflation data.

Broad-based gains boosted all three major U.S. stock indexes and nudged the S&P 500 to within 1 percentage point of its all-time closing high reached in January 2022. If the benchmark index closes above that level, that would confirm it has been in a bull market since bottoming in October 2022.

The blue-chip Dow nabbed another all-time closing high.

Small-caps have had a strong run in December; the Russell 2000 led gainers, rising 1.9%. The index has surged over 11.7% in December so far.

“It’s Fed fumes,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “And there’s no real catalyst at this point in the calendar year to provide any kind of downside pressure.”

“Obviously, the levels investors hold dear like bull and bear markets are important psychologically,” Mayfield said. “But what’s more important is the breadth is expanding, the momentum is there, and the economy is confirming this move.”

FedEx tumbled 8% in extended trade after the package delivery company cut its full-year revenue forecast as it battles United Parcel Service in what is shaping up to be a weak holiday season. UPS dropped 2.6%.

At the conclusion of the central bank’s policy meeting last Wednesday, the Federal Open Market Committee signaled that it had reached the end of its tightening cycle and opened the door to rate cuts in the coming year.

Atlanta Fed President Raphael Bostic said on Tuesday there was “no urgency” to begin cutting rates, given the strength of the economy and the slow rate at which inflation is cooling down toward the central bank’s 2% annual target.

Even so, financial markets are pricing in a 67.5% likelihood that the Fed will implement a 25 basis-point rate cut as soon as March, according to CME’s FedWatch tool.

“The market is probably running ahead of the Fed a little bit and the Fed is right to throw some water on that,” Mayfield added. “But the markets aren’t really buying it and the Fed is not doing much to change the narrative.”

On the economic front, a report from the Commerce Department showed groundbreaking on new single-family homes surged 18% to more than a 1-1/2 year high in November.

The S&P 1500 Homebuilding index and the Philadelphia SE Housing index advanced 1.6% and 1.2%, respectively.

The Commerce Department is expected to release its final take on third-quarter GDP on Thursday, to be followed by its broad-ranging Personal Consumption Expenditures (PCE) report on Friday, which will cover income growth, consumer spending, and crucially, inflation.

The Dow Jones Industrial Average rose 251.9 points, or 0.68%, to 37,557.92, the S&P 500 gained 27.81 points, or 0.59%, to 4,768.37 and the Nasdaq Composite added 98.03 points, or 0.66%, to 15,003.22.

All 11 major sectors of the S&P 500 ended the session in positive territory, with energy and communication services enjoying the largest percentage gains.

Boeing rose 1.2% after German airline Lufthansa revealed it ordered 40 737-8 MAX jets from the planemaker.

Kenvue climbed 2.2% following a U.S. court ruling in favor of the consumer health company in a lawsuit over the company’s drug Tylenol.

Amgen advanced 1.1% after BMO upgraded the company’s shares to “outperform” from “market perform.”

Advancing issues outnumbered declining ones on the NYSE by a 4.68-to-1 ratio; on Nasdaq, a 2.85-to-1 ratio favored advancers.

The S&P 500 posted 48 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 200 new highs and 82 new lows.

Volume on U.S. exchanges was 11.61 billion shares, compared with the 11.97 billion average for the full session over the last 20 trading days.

(Reporting by Stephen Culp in New York; Additional Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru, and by Noel Randewich in Oakland, California; Editing by Aurora Ellis and Matthew Lewis)

By Saqib Iqbal Ahmed

NEW YORK (Reuters) -The U.S. dollar rose against the yen on Tuesday after the Bank of Japan gave no sign that its ultra-loose monetary policy was set to end, but expectations for interest rate cuts next year continued to weigh against the greenback more broadly.

The Bank of Japan maintained its ultra-loose policy settings as expected, as it opted to await more evidence on whether wages and prices would rise enough to justify a shift away from massive monetary stimulus.

The central bank also made no change to its dovish policy guidance, dashing hopes among some traders it would tweak the language to signal a near-term end to negative interest rates.

“Traders are pulling back on a move into positive rate territory from the Bank of Japan into early new year,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

“There was no hint in the press conference or in the statement that policymakers are ready to move rates up dramatically,” Schamotta said.

The dollar was 0.79% higher against the yen at 143.925 yen. Through Monday, the dollar had retreated about 3.7% against the yen this month, hurt by broad dollar weakness and also as traders stepped up yen-buying on speculation of a BOJ policy shift.

Meanwhile the dollar continued to struggle against most majors as traders sold the U.S. currency on expectations that the Federal Reserve is about to start cutting rates as early as March.

While Fed officials have pushed back against market expectations of how soon the Federal Open Market Committee (FOMC) could cut rates, those comments have done little to sway market pricing and stem the greenback’s decline.

“We’re going to maybe see a little bit of a rocky start to the year where people are going to try to sell dollars just on Fed expectations and as the Bank of England and ECB remain somewhat in the higher-for-longer camp, and EM assets continue to rally,” Brad Bechtel, global head of FX at Jefferies in New York.

But the relative strength of the U.S. economy should insulate the dollar from further pronounced weakness, he said.

“In the U.S., maybe we slow a bit, but we don’t go into recession. That’s actually still pretty dollar positive,” Bechtel said.

The dollar index, which measures the currency’s strength against a basket of six rivals, was 0.30% lower at 102.18. The index has dipped 1.5% over the last week.

Chicago Fed President Austan Goolsbee on Monday said the Fed was not pre-committing to cutting rates soon or swiftly, and the jump in market expectations that it will do so was at odds with how the U.S. central bank functions.

A reading on the core Personal Consumption Expenditures (PCE) price index – the Fed’s preferred measure of underlying inflation – is due this week, and may provide clarity on whether inflation has slowed enough for the Fed to begin easing policy next year.

The risk-sensitive Australian and New Zealand dollars sat around their highest in nearly five months, further beneficiaries of the softening dollar.

The Aussie was 0.78% higher at $0.6757, its highest since late July. Minutes from the Reserve Bank of Australia’s December policy meeting showed on Tuesday that the bank considered hiking rates, but decided there were enough encouraging signs on inflation to pause for more data.The kiwi rose 0.85% to 0.62645.

The Canadian dollar strengthened to a four-and-a-half-month high against its U.S. counterpart as investors reduced bets on an early start to Bank of Canada interest rate cuts after domestic data showed inflation holding steady in November.

The pound rose 0.56%, helped by the dollar’s broad weakness and as investors increasingly talked up sterling as a hot prospect for next year.

In cryptocurrencies, Bitcoin was about flat on the day at $42,365.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Rae Wee in Singapore and Alun John in London, additional reporting by Summer Zhen in Hong Kong; Editing by Ed Osmond and Nick Zieminski)

By Phil Stewart and John Davison

MANAMA/DUBAI (Reuters) – The United States on Tuesday launched a multinational operation to safeguard commerce in the Red Sea as attacks by Iran-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.

The Houthi militant group, which controls vast amounts of territory in Yemen after years of war, has since last month fired drones and missiles at international vessels sailing through the Red Sea – attacks it says respond to Israel’s devastating assault on the Hamas-ruled Gaza Strip.

This week, the attacks began to take a toll on global trade, disrupting a key trade route that links Europe and North America with Asia via the Suez Canal.

Oil major BP paused all Red Sea transits, and a slew of top shipping firms including Maersk started diverting shipments normally made through Suez around the Cape of Good Hope on Africa’s southern tip. The new route around Africa adds days to journey times and raises costs. The list of companies avoiding the Red Sea continued to grow on Tuesday.

The crisis, which has grown out of the war between Israel and Palestinian Islamist group Hamas, is the latest in the Middle East to pit the United States and its allies against Iran and its regional Arab proxy militias.

Hamas killed 1,200 Israelis in a cross-border raid on Oct. 7, drawing a devastating Israeli offensive that has killed more than 19,000 Palestinians in Gaza.

Iranian proxies including the Houthis and Lebanese Hezbollah have fired rockets at Israel since the conflict began. The Houthis, meanwhile, have stepped up their Red Sea attacks, threatening to target all ships heading to Israel and warning shipping companies against dealing with Israeli ports.

U.S. Secretary of Defense Lloyd Austin, who is on a trip to Bahrain, home to the U.S. Navy’s headquarters in the Middle East, said Britain, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain were among nations involved in the Red Sea security operation.

The group, widely dubbed in media reports a “task force,” will conduct joint patrols in the southern Red Sea and the adjacent Gulf of Aden.

“This is an international challenge that demands collective action,” Austin said in a statement, announcing the initiative as “Operation Prosperity Guardian.” He called on other countries to contribute as he condemned “reckless Houthi actions”.

But it was unclear how many other countries are willing to do what mostly U.S. warships have done in recent days – shoot down Houthi missiles and drones, and rush to the aid of commercial ships under attack.

A European diplomat whose country will take part in the task force said the idea of the operation was for participating nations’ ships to shoot down missiles and drones and accompany vessels through the Red Sea.

The Houthis, in a statement late on Tuesday, said they were only targeting Israeli ships or ships heading into Israeli ports and posed no threat to any country, but accused the new U.S.-led task force of being “part of the aggression against Gaza and the Palestinian people.”

Mohammed Ali al-Houthi, a senior Houthi official, told Iranian TV on Tuesday that any country acting against Houthi forces would see its ships targeted in the Red Sea.

A U.S. military official who spoke on condition of anonymity played down the idea that naval ships would escort commercial vessels, given that hundreds normally travel the route daily, but said the U.S. operation would position ships in areas where they could have the greatest security benefit.

IMPACT ON GLOBAL TRADE

BP’s decision to temporarily pause all transit through the Red Sea and oil tanker group Frontline’s saying its vessels would avoid passage through the waterway showed that the crisis was broadening to include energy shipments. Crude oil prices rose for a second straight day on Tuesday as the Houthi attacks on ships disrupted trade and more companies were forced to reroute vessels.

Shipping companies continued to reroute on Tuesday. Denmark’s Maersk, which had paused Red Sea shipping, said it would sail its ships around Africa until further notice.

Maersk said the Red Sea task force was a “positive” development, but said it was seeking more details on how it would work.

“With the line of impacted vessels building fast in the area, progressing with speed will be key for the coalition in order to minimise direct negative impact on global trade,” a Maersk statement said.

International firms said they were drawing up contingency plans. Sweden’s Electrolux said it had set up a task force to find alternative routes or identify priority deliveries if needed.

Many other ships were still plying the Red Sea, though several ships had armed guards onboard, LSEG data showed. A number of container vessels were anchored and others turned off tracking systems as traders adjusted routes and prices in response to the maritime attacks.

Industry sources said the impact on global trade would depend on how long the crisis persists, but insurance premiums and longer routes would be immediate burdens.

The longer trip will cost up to $1 million extra in fuel for every round trip between Asia and Northern Europe, according to estimates from freight platform Xeneta.

Economic policymakers said it was too early to assess the broader financial impact, but the main concern was whether disruption would get serious enough to ignite a new round of global inflation, just as central banks are finally overcoming price pressures after the COVID-19 pandemic.

About 12% of world shipping traffic usually transits via the Suez Canal, the shortest shipping route between Europe and Asia, passing then as well into Red Sea waters off Yemen.

IRAN DENIES BLAME

Austin said on Monday that Iran was behind the Houthi attacks. Iran denies involvement but says it supports its Houthi allies.

The European diplomat said the task force aimed to send a strong signal to Iran and its proxies. “There is no doubt Houthis are acting on behalf of Iran,” the diplomat said, speaking on condition of anonymity.

Many major Arab allies of the United States have so far declined to join the task force. Bahrain’s defence minister met Western counterparts to discuss maritime security, an official social media page said on Tuesday, but gave no other details.

(Reporting by Phil Stewart, Mohammed Ghobari, Yuka Obayashi, Lisa Barrington, John Irish, Anne Kauranen, Nayera Abdallah, Josephine Mason, Jacob Gronholt-Pedersen, Jonathan Saul, Reuters bureaux, Dubai newsroom; writing by John Davison, Alexander Cornwell, Elisa Martinuzzi; editing by Hugh Lawson, Mark Heinrich and Leslie Adler)

By Rae Wee and Alun John

NEW YORK (Reuters) -The U.S. dollar jumped against the yen on Tuesday after the Bank of Japan gave no sign that its ultra-loose monetary policy was set to end, but the dollar was broadly softer against other majors, weighed down by expectations for interest rate cuts next year.

The Bank of Japan maintained its ultra-loose policy settings as expected, as it opted to await more evidence on whether wages and prices would rise enough to justify a shift away from massive monetary stimulus.

The central bank also made no change to its dovish policy guidance, dashing hopes among some traders it would tweak the language to signal a near-term end to negative interest rates.

“Traders are pulling back on a move into positive rate territory from the Bank of Japan into early new year,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

“There was no hint in the press conference or in the statement that policymakers are ready to move rates up dramatically,” Schamotta said.

The dollar was 0.76% up against the yen at 143.89 yen. Through Monday, the dollar had retreated about 3.7% against the yen this month, hurt by broad dollar weakness and also as traders stepped up yen-buying on speculation of a BOJ policy shift.

Meanwhile the dollar continued to struggle against most majors as traders sold the U.S. currency on expectations that the Federal Reserve is about to start cutting rates as early as March.

While Fed officials have pushed back against market expectations of how soon the Federal Open Market Committee (FOMC) could cut rates, those comments have done little to sway market pricing and stem the greenback’s decline.

The dollar index, which measures the currency’s strength against a basket of six rivals, was 0.35% lower at 102.13. The index has dipped 1.5% over the last week.

Chicago Fed President Austan Goolsbee on Monday said the Fed was not pre-committing to cutting rates soon or swiftly, and the jump in market expectations that it will do so was at odds with how the U.S. central bank functions.

“It may take (the) PCE inflation or comments from FOMC Chair (Jerome) Powell to encourage market participants to delay their expectations for the start of the rate cut cycle,” said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia.

A reading on the core Personal Consumption Expenditures (PCE) price index – the Fed’s preferred measure of underlying inflation – is due this week, and may provide clarity on whether inflation has slowed enough for the Fed to begin easing policy next year.

The risk-sensitive Australian and New Zealand dollars sat around their highest in nearly five months, further beneficiaries of the softening dollar.

The Aussie was 0.95% higher at $0.677, its highest since late July.

The kiwi rose 0.84% to 0.6264.

Minutes from the Reserve Bank of Australia’s December policy meeting showed on Tuesday that the bank considered hiking rates, but decided there were enough encouraging signs on inflation to pause for more data.

The Canadian dollar strengthened to a four-and-a-half-month high against its U.S. counterpart as investors reduced bets on an early start to Bank of Canada interest rate cuts after domestic data showed inflation holding steady in November.

The pound rose 0.68%, helped by the dollar’s broad weakness and as investors increasingly talked up sterling as a hot prospect for next year.

In cryptocurrencies, Bitcoin was about flat on the day at $42,384.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Rae Wee in Singapore and Alun John in London, additional reporting by Summer Zhen in Hong Kong; Editing by Christopher Cushing, Bernadette Baum and Ed Osmond)

(Reuters) -Five Republican candidates are seeking to challenge former U.S. President Donald Trump for the party’s nomination in the November 2024 presidential contest to take on President Joe Biden, a Democrat who is running for reelection.

Here is a list of the Republican Party’s leading candidates:

DONALD TRUMP

Trump has embraced his indictments in four separate criminal cases – unprecedented for a former American president – and leveraged them to boost his popularity among Republicans and raise funds, helping to make him the Republican frontrunner with 61% in the latest Reuters/Ipsos polling.

Trump, 77, has called the indictments a political witch hunt to thwart his pursuit of a second four-year term, an assertion that the Justice Department has denied. If elected again, Trump has vowed revenge against his perceived enemies and has adopted increasingly authoritarian language, including saying he would not be a dictator except “on day one.”

He has promised other sweeping changes, including overhauling the federal civil service with loyalists and imposing tougher immigration policies such as mass deportations and ending birthright citizenship. He has also promised to gut Obamacare health insurance and impose harsher curbs on trade with China.

NIKKI HALEY

A former South Carolina governor and Trump’s ambassador to the United Nations, Haley, 51, has emphasized her relative youth compared to Biden, 81, and Trump, as well as her background as the daughter of Indian immigrants.

Haley has gained a reputation in the Republican Party as a solid conservative who has the ability to address issues of gender and race in a more credible fashion than many of her peers. She has also pitched herself as a stalwart defender of American interests abroad.

She earned 12% support among Republicans, according to the Reuters/Ipsos survey. In state-level polls, Haley has typically led rival Ron DeSantis in South Carolina and New Hampshire, where she has secured Governor Chris Sununu’s endorsement.

RON DESANTIS

The Florida governor has positioned himself to the right of Trump on several key social issues such as abortion, but his campaign has struggled to gain traction and he remains 50 percentage points behind the former president in the Reuters/Ipsos December poll with 11%.

DeSantis, 45, has fired staff and rebooted his campaign several times, but those steps have done little to boost his candidacy.

His campaign says it is focused on stopping Trump in Iowa, where the party will hold its first nominating contest in January. He got a lift on Nov. 6 when Iowa’s popular governor, Kim Reynolds, endorsed him, and rose slightly in a recent statewide poll.

VIVEK RAMASWAMY

A former biotechnology investor and executive, Ramaswamy, 38, started a company in 2022 to pressure firms to abandon environmental, social, and corporate governance initiatives. The political outsider has stoked grassroots chatter as a potential alternative to Trump but has failed to gain traction with just 7% support in the Reuters/Ipsos survey.

Ramaswamy is a fervent supporter of the former president, and has drawn his rivals’ ire for his verbal attacks at candidate debates. He has also voiced support for conspiracy theories, including suggesting that Trump supporters’ Jan. 6, 2021, attack on the U.S. Capitol was an inside job, and has pledged to pardon Trump if elected.

CHRIS CHRISTIE

Christie, 61, advised Trump’s 2020 White House campaign, but became a vocal critic of the former president after the Jan. 6 attack, and has stepped up his verbal attacks as Trump faced a growing number of criminal charges.

The former New Jersey governor and federal prosecutor has said he is increasingly convinced Trump will be convicted, and has cast himself as one of the few Republicans willing to directly take on Trump over his actions rather than appease him.

Christie saw just 2% support in the latest poll.

ASA HUTCHINSON

The former Arkansas governor launched his bid for the White House in April with a call for Trump to step aside to deal with the former president’s first indictment. Hutchinson, 73, has touted his experience leading his deeply conservative state as proof he can deliver on policies Republican voters care about, citing tax cuts and job creation initiatives.

Hutchinson only qualified for the first Republican debate and saw no support in the Reuters/Ipsos December poll.

(Compiled by the Washington newsroom; writing by Susan Heavey; editing by Jonathan Oatis)

By Rae Wee and Alun John

SINGAPORE/LONDON (Reuters) -The yen tumbled on Tuesday after the Bank of Japan (BOJ) maintained its ultra-loose monetary policy, as expected, and more surprisingly did not signal a change was approaching, while the dollar drifted at the low end of its recent range.

The dollar jumped 1.3% on the yen, and the euro a touch more, each set for its biggest daily gain since end October, the BOJ’s last meeting when it also disappointed markets which had been expecting a hint policy was changing.

The greenback reached 144.95 yen, and the common currency 158.56.

While the outcome was within market expectations, investors were on the lookout for signs on whether the dovish central bank might signal an eventual move away from negative interest rates.

“Everyone is trying to jump on the last trade of the year,” said Lee Hardman, senior currency analyst at MUFG.

“The message from the BOJ today is that they are still very cautious and there is no strong indication that they are getting close to raising rates.”

BOJ governor Kazuo Ueda BOJ told a press conference: “The prospects for (sustainably achieving our inflation target) are gradually heightening. But in terms of whether the threshold would be met, we’d prefer to look at more data.”

Elsewhere, the pound gained 0.47% to $1.2707 outperforming the euro which rose 0.16% to $1.0941.

That left the U.S. dollar index little changed at 102.52, above last week’s four-week low of 101.75 but still down over 4% since early October, as the Fed, at its meeting last week, gave succour to investors expecting rate cuts in 2024.

GREENBACK DECLINE

While Fed officials have pushed back against market expectations of how soon the Federal Open Market Committee (FOMC) could cut rates, those comments have done little to sway market pricing and stem the greenback’s decline.

Chicago Fed President Austan Goolsbee on Monday said the Fed was not pre-committing to cutting rates soon or swiftly, and the jump in market expectations that it will do so was at odds with how the U.S. central bank functions.

“It may take (the) PCE inflation or comments from FOMC Chair (Jerome) Powell to encourage market participants to delay their expectations for the start of the rate cut cycle,” said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia.

A reading on the core Personal Consumption Expenditures (PCE) price index – the Fed’s preferred measure of underlying inflation – is due this week, and may provide clarity on whether inflation has slowed enough for the Fed to begin easing policy next year.

Elsewhere, the risk-sensitive Australian and New Zealand dollars sat around their highest in nearly five months, further beneficiaries of the softening dollar.

The Aussie rose 0.4% to $0.6733, having peaked at $0.6736 in the previous session, its highest since July 31.

The kiwi rose 0.35% to $0.6233.

Minutes from the Reserve Bank of Australia’s December policy meeting showed on Tuesday that the bank considered hiking rates, but decided there were enough encouraging signs on inflation to pause for more data.

(Reporting by Rae Wee in Singapore and Alun John in London, additional reporting by Summer Zhen in Hong Kong; Editing by Christopher Cushing, Bernadette Baum and Ed Osmond)