Investing.com — Most Asian currencies rose Thursday after U.S. inflation data reinforced expectations for a Federal Reserve rate cut next week, while the focus was on China’s annual policy meeting for clues on new stimulus.
US data showed on Wednesday that inflation rose at the fastest pace in seven months in November, but was largely in line with expectations. This led markets to price a 98% chance of a 25 basis point cut next week, up from 81% last week, according to .
The price fell 0.2%, but also fell in Asian hours on Thursday. But the dollar still remained largely resilient amid doubts about how quickly the Fed will cut rates in 2025.
Chinese Yuan Rises; focus on CEWC
The Chinese yuan’s offshore pair fell 0.2% on Wednesday, while the onshore pair was largely unchanged.
The focus was now on the China Central Economic Works Conference (CEWC), a two-day meeting that will conclude later on Thursday. The CEWC is a crucial event as it discusses how China will tackle internal challenges such as slowing growth, weak consumption and external pressures such as trade tensions.
Top Chinese leaders and policymakers are considering the possibility of devaluing the yuan in 2025 in anticipation of higher US trade tariffs when Donald Trump returns to the White House next month, Reuters reported on Thursday, citing sources.
This potential strategy highlights China’s recognition of the need for stronger economic stimulus to counter Trump’s proposed punitive trade actions, the report said.
The South Korean won pair rose 0.3% amid an ongoing political crisis in the country. In recent developments, South Korean police attempted to raid President Yoon Suk Yeol’s office on Wednesday after he was subjected to a criminal investigation into his attempt to declare martial law in the country.
“I will fight to the end,” Yoon said Thursday, lashing out at his political opponents amid demands to remove him from power through impeachment.
The Japanese yen pair fell 0.1% lower, while the Singapore dollar pair traded slightly lower.
Elsewhere, the Philippine peso pair fell 0.3%, while the Indian rupee edged higher.
Australian dollar jumps after employment data
The Australian dollar outperformed its peers on Thursday, with the pair rising 0.8% after data showed the country’s rate rose more than expected in November while falling unexpectedly.
The data led market participants to further tone down bets that the Reserve Bank of Australia would cut rates in the near term. There is broad consensus that the RBA will start easing in the second quarter of 2025.
The RBA had left rates unchanged on Tuesday, citing tight labor market conditions and persistent underlying inflation in the province.
