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.<\/p>\n
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.<\/p>\n
The\u00a0Japanese yen<\/a><\/span>\u00a0was 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.<\/p>\n 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\u2019s comments also came just a few days after data showed\u00a0Japan\u2019s economy<\/a><\/span>\u00a0shrank much more than expected in the September quarter.<\/p>\n The\u00a0South Korean won<\/a><\/span>\u00a0steadied 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.<\/p>\n The\u00a0Australian dollar<\/a><\/span>\u00a0fell slightly on Friday and was set to add 1.6% this week. Focus was now on the\u00a0minutes<\/a><\/span>\u00a0of the Reserve Bank\u2019s recent meeting, which were due next week.<\/p>\n The\u00a0Singapore dollar<\/a><\/span>\u00a0traded sideways on Friday, taking some support from data that showed an improvement in the country\u2019s key\u00a0non-oil exports<\/a><\/span>. But signs of continued weakness in China kept Singapore\u2019s near-term economic prospects uncertain.<\/p>\n The\u00a0yuan<\/a><\/span>\u00a0was 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\u00a0industrial production<\/a><\/span>\u00a0and\u00a0retail sales<\/a><\/span>\u00a0grew more than expected.<\/p>\n But other economic indicators for October still pointed to consistent weakness in the Chinese economy, especially as it slipped into\u00a0disinflation territory<\/a><\/span>.<\/p>\n Focus is now on the People\u2019s Bank of China, which is set to decide on its benchmark\u00a0loan prime rate<\/a><\/span>\u00a0on Monday. But the bank is expected to keep rates at record lows, as it struggles to maintain a balance between shoring up economic growth and stemming weakness in the yuan.<\/p>\n The\u00a0Indian rupee<\/a><\/span>\u00a0was among the few outliers this week, falling 0.1% on Friday and remaining close to record lows, amid growing concerns that the Indian economy was running out of steam.<\/p>\n The\u00a0dollar index<\/a><\/span>\u00a0and\u00a0dollar index futures<\/a><\/span>\u00a0steadied in Asian trade on Friday. But the greenback was set to lose nearly 1.5% this week, as a string of middling economic readings spurred bets that the Fed was done raising interest rates.<\/p>\n After softer-than-expected\u00a0inflation readings<\/a><\/span>\u00a0for October, data on Thursday showed that\u00a0weekly jobless claims<\/a><\/span>\u00a0grew more than expected for a fourth straight week.<\/p>\n The readings spurred growing bets that the Fed was done hiking interest rates, and will likely\u00a0begin trimming rates by mid-2024<\/a><\/span>.<\/p>\nChinese yuan heads for weekly gain, rate decision on tap<\/h3>\n
Dollar set for weekly drop as markets look to Fed rate cuts<\/h3>\n