Most Asian currencies edged lower on Monday as investors assessed mixed signals on the Federal Reserve’s next policy move. The US Dollar Index held steady after a strong performance last week, keeping pressure on regional currencies. According to the CME FedWatch Tool, expectations for a 25-basis-point Fed rate cut in December rose sharply to about 69%, up from 44% a week earlier. This shift came after New York Fed President John Williams hinted that policy adjustments could be possible in the near term. Still, several Fed officials emphasized that inflation and labor market strength remain concerns, leaving December’s outcome uncertain.
Analysts at ING noted that the minutes from the October FOMC meeting showed many officials leaning against a December rate cut, suggesting that without key upcoming economic data, opinions are unlikely to shift significantly.
Across Asia, the Chinese yuan (USD/CNH) inched 0.1% higher, while the Singapore dollar (USD/SGD) rose 0.2%. The South Korean won (USD/KRW) dropped 0.5%, marking the biggest decline among regional currencies. The Australian dollar (AUD/USD) remained largely stable.
The Japanese yen (USD/JPY) continued to face downward pressure after touching multi-month lows last week. Expectations that the Bank of Japan may maintain or even ease monetary policy—combined with expansionary fiscal measures under new Prime Minister Sanae Takaichi—added to the yen’s weakness. Tokyo officials reiterated that currency intervention remains possible if volatility becomes excessive, offering limited support.
Meanwhile, the Indian rupee (USD/INR) strengthened 0.5% after sinking to a record low of 89.72 on Friday. Reports indicated that the Reserve Bank of India stepped in to stabilize the currency following a sharp sell-off triggered when the pair broke past the 88.80 level, which RBI had previously defended.
This latest currency movement reflects ongoing uncertainty in global monetary policy and shifting investor sentiment across Asian markets.


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