Investing.com– Most Asian currencies moved lower on Monday as South Korea posted key losses amid an intensifying political crisis in the country, while the US dollar was largely steady ahead of key inflation report due this week.
Investors' appetite for riskier assets was also eroded by geopolitical tensions in the Middle East, after rebel forces in Syria ousted President Bashar al-Assad and took control of Damascus.
Media reports said that al-Assad and his family landed in Moscow, and were given asylum, while Israeli forces entered Syria.
S. Korean won remains near 2-year low
The South Korean pair of winners climbed nearly 1% on Monday, approaching its two-year high mark. The currency had depreciated more than 2% against the US dollar last week.
The winner is the worst performing fund in the sector, having fallen almost 10% in 2024 so far.
South Korea's political crisis intensified after prosecutors launched a criminal investigation into President Yoon Suk Yeol on Sunday, following his failed attempt to impose martial law in the country last week. went. Yoon survived an impeachment vote in the opposition-controlled parliament on Saturday, but the leader of his own party said Yoon would be sidelined before he finally steps down.
Asian currencies, already subdued due to a strengthening dollar and fears of a trade war between the US and China under US President Donald Trump, have been further pressured by the political instability in South Korea. The country is seen as a pillar of the East Asian economy.
The Taiwan dollar pair rose 0.3%, while the Singapore dollar pair rose 0.1% higher.
The Australian dollar pair was largely unchanged ahead of Tuesday's Reserve Bank rate decision. The RBA is expected to keep rates unchanged but could tighten its hawkish stance amid signs of weak economic conditions in Australia.
The Indian rupee pair rose 0.1% after the Reserve Bank of India cut the key bank reserve ratio on Friday to boost liquidity amid signs the Indian economy was cooling.
Japan GDP, China CPI in focus
The Japanese yen pair was largely unchanged as investors remain divided on whether the Bank of Japan (BOJ) will raise rates next week, following Monday's economic growth reading.
Revised data (GDP) showed that Japan's economy grew slightly more than expected in the third quarter. However, the reading was well below the previous quarter's increase.
The onshore Chinese yuan pair rose 0.3%, after data showed the Chinese kept contracting more than expected in November, despite recent stimulus efforts. in November also still under control.
China's annual Central Economic Work Conference (CEWC) will be the focus this week for announcements of more stimulus measures from the country's central bank.
Dollar steady ahead of US inflation, Fed expected to cut rates next week
They inched 0.1% higher, while Asia hours were also up slightly.
US inflation data for November is due on Wednesday, which could provide insight into the Federal Reserve's interest rate path.
Markets expect a 25 basis point cut by the Fed next week, even after Friday's data showed that it grew more than expected in November.
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