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Investing.com – Most Asian currencies fell on Tuesday and are headed for annual losses as the dollar remains strong through 2025, while China’s yuan weakened after data showed of the country’s firm is growing at a slower pace.
It was down 0.1% in Asian trade but remained close to the 2-year level it touched earlier in the month. It is also confirmed below.
Asian stocks have fallen sharply this year as the prospect of a Federal Reserve interest rate hike, and fears about a possible US-China trade war under the Donald Trump administration, have dampened risk sentiment.
The Fed’s latest signal of less tapering in 2025 has given renewed strength to the dollar and put downward pressure on Asian currencies.
China’s yuan slips as factory output grows at slower-than-expected pace
The overseas Chinese yuan rose 0.2% on Tuesday, while the two foreign currencies were unchanged.
China posted a third straight month of gains in December as new stimulus measures continued to provide support, data from the purchasing managers’ index showed on Tuesday. However, the rise was slightly lower than market expectations and below last month’s figure.
Markets are waiting for more clarity on Beijing’s plans for stimulus measures next year. Recent reports have suggested that the country will increase spending to support economic growth.
Asian stocks are down year-on-year
The Japanese yen fell 0.3% on Tuesday after hitting a five-month high in the previous session. The yen was set to lose more than 10% against the US dollar for the year.
The value of the Singapore dollar did not change much but would rise every year.
The Australian dollar was slightly lower on Tuesday.
The Indian rupee rose 0.1%, and was on track to rise more than 3% this year. The rupee has been depreciating to a new record against the US dollar this month.
The Thai baht rose 0.3%, while the Indonesian rupiah rose 0.2% on Tuesday.
South Korea has seized control amid escalating political unrest
South Korea’s pair rose 0.1% on Tuesday. The victory weakened almost 6% against the American Dollar in December, which saw the failure of martial law in the country.
The currency is the worst-performing currency among its Asian peers, expected to decline by more than 12% in 2024.
In the latest development, a South Korean court approved an arrest warrant on Tuesday for President Yoon Suk Yeol, who has been charged and suspended following his December 3 decision to impose martial law.
The Chief Corruption Investigation Office (CIO) said the West Seoul District Court had granted the warrant sought by investigators probing whether Yoon briefly imposed martial law.
