Asia FX set for weekly losses, dollar strong ahead of payrolls reading
investing.comInvesting.com-- Most Asian currencies moved in a flat-to-low range on Friday, while the dollar hovered near three-week highs as markets awaited key U.S. labor data for more cues on the Federal Reserve’s plans for interest rate cuts.
Regional currencies were set for steep losses in the first week of 2024, as the dollar rebounded sharply amid growing uncertainty over exactly when the Fed plans to begin trimming interest rates.
Traders were seen scaling back expectations that the Fed could begin cutting rates by as soon as March 2024, while the full scope of the potential cuts also remained unclear.
The rate-sensitive Japanese yen was among the worst-hit by this uncertainty, with the currency set to lose nearly 3% this week after a series of steep losses.
The yen was at its weakest level in more than three weeks, as sentiment towards Japan was also dented by a devastating earthquake in the country.
Other Asian currencies were also set for steep weekly losses, as traders largely unwound a rebound in the sector through late-2023.
The Chinese yuan fell 0.1% on Friday and was set to lose nearly 1% this week, as sentiment towards China remained largely negative. The yuan was among the worst-performing Asian currencies in 2023, as a Chinese economic rebound failed to materialize.
Still, more weakness in the yuan was held back by a series of stronger daily midpoint fixes by the People’s Bank of China.
The South Korean won was flat on Friday, and was set to lose 1.5% this week, while the Australian dollar also tread water and was headed for a 1.6% weekly loss.
The Indian rupee hovered near record lows before the release of government estimates for gross domestic product in 2024. A Reuters poll expects the government to
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