Investing.com– Most Asian currencies fell on Tuesday and were heading for annual losses, while the dollar remained robust through 2025 while China’s yuan weakened after data showed the country’s industrial activity was growing at a slower pace.

In Asian trading, the index was 0.1% weaker but remained near the two-year high it hit earlier this month. It was also marked below.

Asian currencies have weakened sharply this year as the Federal Reserve’s interest rate outlook and fears of a potential U.S.-China trade war under Donald Trump lowered risk sentiment.

The Fed’s recent signal of fewer cuts in 2025 has strengthened the dollar again and created weakening pressure on Asian currencies.

The Chinese yuan is losing due to slower-than-expected growth in factory activity

On Tuesday, the onshore Chinese yuan pair rose 0.2%, while the offshore pair remained largely unchanged.

Things rose in China for a third straight month in December as a raft of novel stimulus measures continued to provide support, purchasing managers’ index data showed on Tuesday. However, the boost was slightly lower than market expectations and lower than the previous month’s reading.

Markets expect greater transparency on Beijing’s stimulus plans for the coming year. Recent reports suggest that the country will boost fiscal spending to support economic growth.

Asian currencies are facing annual declines

The Japanese yen pair fell 0.3% on Tuesday after hitting a five-month high in the previous session. The yen was expected to lose more than 10% against the US dollar this year.

The Singapore dollar pair was largely unchanged but headed for a year-over-year gain.

The Australian dollar depreciated slightly on Tuesday.

The Indian rupee pair rose 0.1% and was on track to gain more than 3% this year. The rupee hit novel record lows against the US dollar this month.

The Thai baht pair rose 0.3% on Tuesday, while the Indonesian rupiah pair gained 0.2%.

South Korea’s victory comes amid deepening political unrest

The South Korean won pair rose 0.1% on Tuesday. In December, the won depreciated by almost 6% against the US dollar, which saw the country’s failed imposition of martial law.

The won is the worst performing currency among its Asian counterparts, with a decline of over 12% in 2024.

The latest information shows that on Tuesday, a South Korean court approved an arrest warrant for President Yoon Suk Yeol, who was impeached and suspended from office in connection with the December 3 decision to impose martial law.

The Corruption Investigation Office for Senior Officials (CIO) said the Seoul Western District Court issued the order sought by investigators investigating Yoon’s short-lived imposition of martial law.