Investing.com — Most Asian currencies rose Monday, while the Japanese yen strengthened against the dollar after the appointment of fund manager Scott Bessent as Treasury secretary pulled down U.S. bond yields and pushed the dollar into the background.
fell to 4.351% after newly elected President Donald Trump’s appointment of Bessent caused investors to position themselves for a more moderate head of the Treasury Department, especially on trade tariffs and immigration.
It was last down 0.5% at 106,950, after hitting a two-year high of 108,090 on Friday. also relaxed.
The Japanese yen pair was 0.4% lower on Monday, after falling 0.4% the previous week. The currency pair tends to closely follow movements in government bond yields and has risen sharply over the past two months as the yen weakened.
The Chinese yuan pair was largely flat after rising 0.2% last week, and the Malaysian ringgit pair fell 0.3%. The Australian dollar pair rose 0.4%.
The dollar is losing ground after eight straight weeks of gains
The dollar retreated on Monday after rising for the past eight weeks. Bessent’s appointment as Treasury secretary weighed on the dollar, despite expectations that he would be a moderate voice in Trump’s administration.
Still, the dollar’s pullback could be temporary, as Bessent has openly favored a strong dollar and also supported trade tariffs.
The dollar is expected to remain supported by Trump’s policies, which are seen as inflationary and are likely to result in higher and longer interest rates in the US in the coming years.
Meanwhile, market participants also cut their commitment to a Federal Reserve rate cut in December by a quarter point to 52%, down from 72% a month ago.
The (PCE) index, the Fed’s preferred inflation measure, will be released next Friday and is expected to provide more clues about interest rates.
Asian economic measurements in focus
The Singapore dollar pair was largely flat following the release of monthly consumer inflation data. Data showed it rose 1.4% in October from a year earlier, lower than the 1.8% forecast due to a moderation in inflation in the services, electricity and gas and other goods sectors , official data showed on Monday.
The meeting will take place on Wednesday and it is widely expected that interest rates will be cut again by 50 basis points. The New Zealand dollar pair rose 0.4% after falling to a one-year low on Friday.
The Indian rupee fell 0.2%, staying close to recent record highs. India will report its third quarter results on Friday.
China will release data for November on Saturday. Data from China is expected on Wednesday.
The South Korean pair traded 0.2% lower. The Bank of Korea will make a decision on Wednesday and could cut interest rates further.
