Investing.com– Most Asian currencies edged higher on Thursday as U.S. inflation data bolstered bets for a Federal Reserve interest rate cut next week, while the focus was on the annual policy meeting China for announcements of new stimulus measures.
US data showed on Wednesday that inflation rose at the fastest pace in seven months in November, but largely in line with expectations. This led to markets pricing in a 98% chance for a 25 basis point cut next week, up from 81% seen last week, according to .
The fall was 0.2%, and it also went lower in Asian hours on Thursday. But the greenback remained mostly resilient on doubts about how quickly the Fed will cut interest rates in 2025.
Chinese yuan rises; focus on CEWC
The Chinese yuan offshore pair fell 0.2% on Wednesday, while the onshore pair was largely unchanged.
The focus was now on China's Central Economic Work Conference (CEWC), a two-day meeting that is due to end later on Thursday. The CEWC is an important event as they consider how China will deal with internal challenges such as slow growth, weak consumption, and external pressures such as trade tensions.
China's top leaders and policymakers are weighing the option of devaluing the yuan in 2025 in anticipation of an increase in US trade tariffs when Donald Trump returns to the White House next month, Reuters reported on Thursday, citing sources. .
This strategy reflects China's recognition that stronger economic incentives are needed to counter Trump's proposed punitive trade actions, the report said.
South Korea's pair of winners rose 0.3% amid ongoing political turmoil in the country. In recent developments, South Korean police attempted to raid the office of President Yoon Suk Yeol on Wednesday, after he came under criminal investigation over his attempt to declare martial law in the country.
“I will fight until the end,” Yoon said Thursday, hitting out at his political opponents, amid calls to remove him from power through impeachment.
The Japanese yen pair slipped 0.1% lower, while the Singapore dollar pair struggled slightly lower.
Elsewhere, the Philippine peso pair fell 0.3%, while the Indian rupee was slightly higher.
Australian dollar jumps after earnings data
The Australian dollar was the best performer among its peers on Thursday, with the pair up 0.8% after data showed the country's growth was stronger than expected in November while it unexpectedly fell .
The data led market participants to further bet that the Reserve Bank of Australia would cut interest rates in the near term. Wide consensus is that the RBA will start easing in the second quarter of 2025.
The RBA on Tuesday kept rates unchanged, citing tight labor market conditions and strong inflation in the county.
