Investing.com– Most Asian currencies posted losses on Thursday while the dollar remained near yearly highs amid growing doubts about whether the Federal Reserve will cut interest rates in December.

Speculation about expansionary policy under Donald Trump has been a key factor strengthening the dollar in recent weeks, along with volatile inflation data for October and less dovish signals from the Fed.

Sentiment in Asia was also dampened by uncertainty over more Chinese stimulus measures, while broader risk appetite weakened amid heightened tensions between Russia and Ukraine.

The dollar is near its highest in a year as investors bet on a December interest rate cut

Asian trade stabilized after a sturdy overnight session.

The dollar was supported by increased caution about future Fed interest rate cuts. Investors were seen to be pricing in a 53.3% chance of a 25 basis point cut in December, significantly lower than the 85.7% chance seen a day ago.

Traders also increased bets that the Fed will keep the interest rate at 46.7% from 14.3% last week.

The change in expectations comes after Fed Chairman Jerome Powell said last week that the resilience of the U.S. economy gave the central bank more time to consider future interest rate cuts. His statement was also preceded by data showing sticky inflation in October.

Trump’s election victory has also strengthened the dollar since early November, and the president-elect is expected to implement more inflationary policies given his protectionist stance on trade and immigration.

US data will be released this week and is expected to provide more clues about the world’s largest economy. data will also be released later on Thursday, and several Fed officials are expected to speak in the coming days.

Asia FX feeble due to exchange rate fluctuations

Asian currencies were pressured by the prospect of relatively higher U.S. interest rates, as well as potential trade headwinds from a Trump presidency.

The Chinese yuan has been among the hardest hit by these concerns, given that Trump has vowed to impose high import tariffs on the country. The yuan pair showed little movement on Thursday and was near four-month highs.

Disappointing signals on Chinese stimulus also put pressure on the yuan.

The Japanese yen strengthened slightly on Thursday, but also suffered immense losses against the dollar in October and November. The pair fell 0.3% after breaching 155 yen this week.

The Australian dollar pair rose 0.2% after hitting a nearly four-month low last week. The South Korean won pair was flat, as was the Singapore dollar pair.

The Indian rupee pair rose 0.1% and was close to a record high of around 84.6 rupees hit earlier in November.

PMI readings from several major Asian economies, including Japan, China, Australia and India, will be released in the coming days and will provide further clues to business activity in the region.

Next Friday, the offer will also include Japanese.