Investing.com– Most Asian currencies strengthened slightly on Friday as the dollar fell from nearly two-month highs, even as warm consumer inflation data strengthened forecasts for a smaller rate cut by the Federal Reserve.

However, most regional currencies recorded minor losses in recent sessions as the latest US data indicated that interest rates would remain relatively higher for an extended period of time.

South Korea’s victory consolidated even as the Bank of Korea lowered interest rates and signaled further potential cuts, while China’s yuan rose, focused solely on more fiscal stimulus from Beijing.

The dollar weakens as markets weigh warm CPI and high unemployment numbers

In Asian trade, the and indexes fell 1% each, retreating from a month-high peak in overnight trading.

While the dollar initially strengthened after a stronger-than-expected inflation reading for September, its gains tapered after labor market data showed a larger-than-expected raise in weekly jobless claims.

Traders continued to bet that the Fed would cut interest rates by 25 basis points in November, an 81.3% chance of this happening.

However, signs of weakness in the labor market will likely push the Fed to lower interest rates consistently over the medium term, even if inflation remains relatively high.

inflation data will be released later Friday and is expected to provide more clues about the world’s largest economy.

Chinese yuan company expects fiscal stimulus

The Chinese yuan strengthened slightly, with the pair falling 0.1%.

The main focus was on the upcoming finance ministry briefing, during which the government presented fiscal stimulus plans.

Analysts expect Beijing to provide at least 2 trillion yuan ($283 billion) in fiscal support, most of which will go to supporting private consumption.

Saturday’s briefing follows a conference on recent monetary stimulus measures that was largely disappointing. Investors continued to have doubts about China’s ability to introduce more fiscal measures given the country’s high debt levels.

South Korean companies won after BOK interest rate cut

The South Korean win strengthened on Friday, with the pair down 0.2%.

The strength of the win even came with BOK up 25 basis points to 3.25% – the first rate cut in over four years.

The central bank has left the door open to further monetary easing as the Korean economy struggles with frail growth and falling inflation.

Broader Asian currencies are losing strength and are mostly posting weekly losses while the dollar is heading for a weekly gain.

The Japanese yen pair held steady at 148.71 yen after nearing 150 yen earlier in the week.

The Australian dollar pair rose 0.2% after falling earlier in the week.

The Indian rupee pair remained near record highs above Rs 84.