Investing.com– Most Asian currencies moved in a flat-to-low range on Thursday as the prospect of slower U.S. interest rate cuts in 2025 kept traders averse to regional markets.
The Chinese yuan was among the worst performers for the day as purchasing managers index data showed support from stimulus measures rolled out in recent months was now petering out.
Regional trading volumes were still limited, as major markets such as Japan remained closed for the New Year holidays.
The dollar remained upbeat, benefiting from expectations of a slower pace of rate cuts by the Federal Reserve in 2025, while protectionist policies under incoming President Donald Trump are also expected to favor the greenback.
The dollar index and dollar index futures moved little in Asian trade, but were at their highest levels since November 2022.
Chinese yuan slips as manufacturing PMIs disappoint
The Chinese yuan weakened on Thursday, with the USD/CNY pair rising 0.3% to 7.3190 yuan- its highest level in over a year.
Caixin PMI data showed that the country’s manufacturing sector grew less than expected in December as support from recent stimulus measures ran dry.
The reading came just days after government PMI data also showed weaker-than-expected growth in the manufacturing sector.
The prints ramped up concerns over a slowing economic recovery in China, with recent stimulus measures having provided only limited support. Increased trade headwinds under Trump are also expected to pressure the Chinese economy, although Beijing is expected to dole out more fiscal stimulus to offset this trend.
