Investing.com — Most Asian currencies fell Thursday as the dollar held steady amid growing uncertainty over the path of U.S. interest rates, while the South Korean won fell sharply after the country’s central bank unexpectedly cut rates .
Investors have refrained from placing big bets ahead of the US Thanksgiving holiday, which is likely to continue trading weakly for the rest of the week.
The dollar held steady after sharp losses overnight, although still within sight of recent two-year highs. Data overnight showed that interest rates, the Federal Reserve’s preferred measure of underlying inflation, rose in line with expectations. Another analysis showed that the US economy grew at a strong pace in the third quarter.
The inability to meet the Federal Reserve’s 2% inflation target, combined with the possibility of higher tariffs on imports, could limit the central bank’s ability to cut rates next year.
The price recently rose 0.1%, while the price was also 0.1% higher.
Currencies in regional markets have remained tepid for most of this week following Monday’s threat from newly elected US President Donald Trump to impose additional trade tariffs on China, which could spark a new trade war between the world’s largest economies. world.
The Singapore dollar The pair rose 0.3%, while the Thai baht pair remained largely unchanged.
The Australian dollar pair rose 0.5%, a day after mixed, showing headline inflation held steady while underlying inflation rose in October.
The Japanese yen pair was also 0.4% higher, while the Indian rupee pair was largely subdued and remained close to recent record highs.
The South Korean won is falling after a surprise interest rate cut by the BoK
In a surprise move on Thursday, the Bank of Korea canceled a second straight meeting as it warned that economic growth was likely to slow further in the coming year.
The South Korean won weakened sharply, with the pair rising 0.5% following the BoK’s decision.
The BoK cut its GDP forecast for 2025 and also said inflation is likely to decline in the coming year.
The Chinese yuan remains under pressure
The Chinese yuan remained under pressure, with the domestic yuan currency pair trading slightly higher at 7.25 per US dollar, remaining near four-month highs.
Major investment banks and research firms are expected to weaken to an average of $7.51 on the dollar through the end of 2025, according to CNBC calculations. That would be the currency’s weakest level since 2004.
The yuan has remained weak following Donald Trump’s re-election and his renewed tariff threats, with plans for additional duties on Chinese imports, including tariffs of up to 60%.
The weakening of the yuan has broader implications for emerging Asian currencies. Trade-dependent currencies such as the South Korean won, the Thai baht and the Malaysian ringgit are under pressure due to their close economic ties with China and the ripple effects of US-China trade tensions.
