Nov 25 2024: Most Asian currencies gained on Monday, with the Japanese yen strengthening against the dollar following the nomination of Scott Bessent as Treasury Secretary, which pulled U.S. bond yields lower.
The yield on 10-year Treasuries fell to 4.351%, with Bessent’s nomination leading investors to expect a more moderate Treasury stance on trade tariffs and immigration.
The Dollar Index was down 0.5% at 106.950, after reaching a two-year high of 108.090 on Friday.
The USD/JPY pair fell 0.4%, while the USD/CNY pair remained mostly unchanged. The USD/MYR pair dropped 0.3%, and the AUD/USD pair rose 0.4%.
Dollar Retreats After Eight-Week Gain
The dollar retreated on Monday after eight consecutive weeks of gains, with Bessent’s nomination adding to expectations of a more moderate approach in Trump’s administration. However, the dollar’s pullback may be temporary, as Bessent has supported a strong dollar and trade tariffs.
The dollar remains supported by Trump’s inflationary policies, likely resulting in higher interest rates for an extended period.
Market expectations for a December rate cut by the Federal Reserve have fallen to 52% from 72% a month ago, according to CME FedWatch.
Focus on Economic Data
The PCE index, the Fed’s preferred inflation measure, will be released on Friday, offering further insights into interest rate decisions.
Asian Economic Data
The USD/SGD pair was flat after Singapore’s October CPI showed a 1.4% increase, below the forecast of 1.8%.
The NZD/USD pair rose 0.4%, ahead of the Reserve Bank of New Zealand’s meeting on Wednesday.
The USD/INR fell 0.2%, near recent record lows, with India’s GDP report due Friday.
China will release PMI data for November on Saturday, and industrial profit data on Wednesday.
USD/KRW fell 0.2% as the Bank of Korea’s rate decision is expected on Wednesday.
