Investing.com – Most Asian currencies fell on Friday as the dollar strengthened ahead of next week’s Federal Reserve interest rate decision, while disappointing stimulus signals from a top-level meeting in China weighed on the yuan.

Investors remained cautious and avoided significant moves ahead of next week’s deadline, when a 25 basis point cut in interest rates is widely expected. Concerns about the long-term trajectory of interest rates cooled market enthusiasm and strengthened the dollar.

The price rose 0.2%, while it rose 0.1% in Asian trading on Friday.

Chinese Yuan Loses as CEWC Fails to Provide Unexpected Stimulus

The onshore Chinese yuan pair rose 0.2% and was hovering near a two-year high, while the offshore pair rose 0.1%.

China concluded its two-day Central Economic Work Conference (CEWC) on Thursday, but left markets disappointed by the lack of aggressive stimulus measures that investors had hoped would boost domestic demand.

China has pledged to widen its budget deficit, enhance debt issuance and ease monetary policy to sustain economic growth amid expected trade tensions with the U.S., according to a CEWC reading on state media. However, markets recognized that these policies would not provide the immediate economic stimulus needed to counter China’s deflationary pressures.

The yuan has been under pressure, with consecutive weekly declines over the past few months amid looming US tariffs under novel President Donald Trump. They were supposed to drop an inch lower for this week.

“With our novel view on tariffs, we have become a bit more cautious about CNY’s near-term prospects. “Trump’s trade weakening could help CNY rebound, but tariff changes could be catalysts for more depreciation,” ING analysts said in a recent note.

The dollar has the best week in a month, the Thai baht is losing ground on the Asia FX exchange

The dollar index had its best week in more than a month even as investors prepared for a Fed rate cut next week. However, higher-than-expected and largely in-line consumer inflation in November led markets to price in a slower pace of rate cuts in 2025.

The Thai baht pair rose by 0.8% and the Indonesian rupiah pair rose by 0.3%.

The pair of South Korean won rose 0.2% a day before a scheduled parliamentary vote to impeach the country’s President Yoon Suk Yeol over his attempt to impose martial law in the country.

The Japanese yen pair rose 0.3% after media reports showed the Bank of Japan was likely to hold its currency rate unchanged next week, contrary to earlier expectations for a hike.

Elsewhere, the Singapore dollar pair rose slightly, while the Australian dollar pair remained largely unchanged.

The Indian rupee pair was subdued on Thursday, remaining near an all-time high.