Nov 28 2024: The U.S. dollar remained steady on Thursday, buoyed by South Korea’s unexpected interest rate cut, while the Japanese yen prepared to post its strongest weekly gains in three months.
The yen weakened slightly during the Asian session but stood at 151.59 per dollar, reflecting a 2.4% weekly rise, driven by expectations of a Bank of Japan rate hike in December. Strong Japanese inflation data and speculation of a potential Federal Reserve rate cut in December have increased pressure on the dollar-yen pair, according to Rabobank’s Jane Foley.
The South Korean won slipped after the Bank of Korea delivered a second consecutive rate cut, surprising markets as only 4 of 38 economists in a Reuters poll had anticipated the move. Authorities intervened to stabilize the currency following the decision.
In Europe, the euro held gains at $1.0553 after hawkish remarks from ECB board member Isabel Schnabel, who advocated for gradual rate cuts that maintain a neutral policy stance. Analysts predict a potential euro rebound toward $1.0650, depending on upcoming inflation data from Germany.
Emerging markets also saw notable moves, with the Mexican peso gaining 1% after reports of progress on migration agreements with the U.S., while the Russian rouble strengthened past 110 per dollar following central bank support measures. Conversely, the Brazilian real hit an all-time low, pressured by fiscal concerns tied to tax cuts.
Major currencies remained range-bound due to reduced trading activity during the Thanksgiving holiday in the U.S., with market participants focusing on inflation data and central bank developments for direction.
