Jan 5, 2024: Across Asia, most currencies saw little movement or marginal declines on Friday, with the dollar maintaining near three-week highs. The focus remained fixed on the upcoming U.S. labor data, which would offer crucial insights into the Federal Reserve’s stance on interest rate adjustments.
The week unveiled a tough start for regional currencies in 2024, facing significant losses due to the dollar’s resurgence. This resurgence has fueled uncertainty regarding the exact timeline for the Fed’s initiation of interest rate reductions.
Traders have visibly adjusted their expectations, pulling back from assumptions that the Fed might promptly implement rate cuts by March 2024. The scale and timing of these potential cuts remain uncertain, adding to the market’s cautious sentiment.