Asia FX muted, dollar set for weekly drop on Fed rate cut bets
Investing.com-- Most Asian currencies moved little on Friday after strong gains earlier this week, while the dollar headed for a sharp weekly fall as weak labor market data fueled more bets that the Federal Reserve will trim interest rates by mid-2024.
Weakness in the dollar put most regional units on course for a strong weekly performance, although a bulk of these gains also came as Asian currencies recovered from multi-month lows.
The Japanese yen was among the biggest beneficiaries of recent dollar weakness, and was set to add 0.6% this week- its best weekly gain in over four months. The currency recovered from a one-year low hit earlier in November.
But Bank of Japan Governor Kazuo Ueda on Friday stressed on the need to maintain an ultra-dovish stance, presenting little near-term relief for the yen. Ueda’s comments also came just a few days after data showed Japan’s economy shrank much more than expected in the September quarter.
The South Korean won steadied near three-month highs on Friday, and was set to add 1.8% this week, after signs of economic resilience in the country helped it recover sharply from a recent one-year low.
The Australian dollar fell slightly on Friday and was set to add 1.6% this week. Focus was now on the minutes of the Reserve Bank’s recent meeting, which were due next week.
The Singapore dollar traded sideways on Friday, taking some support from data that showed an improvement in the country’s key non-oil exports. But signs of continued weakness in China kept Singapore’s near-term economic prospects uncertain.
The yuan was flat, and was headed for a 0.6% weekly gain as it recovered from a one-year low. Data released this week showed some signs of resilience in the Chinese economy, as
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