Investing.com: Most Asian currencies traded in a flat-to-low range on Thursday as the prospect of slower U.S. interest rate cuts in 2025 keeps investors averse to regional markets.

China’s yuan was among the worst performers on the day as purchasing managers’ index data showed support from stimulus measures introduced in recent months slowly fading.

Regional trade volumes remained subdued as major markets such as Japan remained closed for the New Year holidays.

The dollar remains bullish, benefiting from expectations of a slower pace of Federal Reserve interest rate cuts in 2025, and protectionist policies under recent President Donald Trump are also expected to support the dollar.

In Asian trade, the and indexes moved slightly but reached their highest level since November 2022.

The Chinese yuan loses amid disappointing manufacturing PMIs

China’s yuan weakened on Thursday, with the pair rising 0.3% to 7.3190 yuan, its highest level in more than a year.

data showed that the country’s manufacturing sector growth in December was lower than expected as support from recent stimulus measures dried up.

The reading came just days after data also showed weaker-than-expected growth in the manufacturing sector.

The reprints have raised concerns about a slowdown in China’s economic recovery, with recent stimulus measures providing only confined support. Increased trade difficulties under Trump are also expected to put pressure on the Chinese economy, although Beijing is expected to provide greater fiscal stimulus to offset this trend.

Asia FX Cultivates Losses in 2024

Most Asian currencies strengthened on Thursday after posting mostly losses through 2024. Most of those losses also came in recent months as the prospect of slower interest rate cuts and more protectionist U.S. policies kept investors largely favoring the dollar.

The Japanese yen was among the hardest hit by the deal as the Bank of Japan’s mostly dovish 2025 outlook increased pressure on the currency. The yen was little changed on Thursday after hitting a five-month high of nearly 158 yen in recent sessions.

The South Korean won strengthened on Thursday, but was one of the worst-performing Asian currencies in 2024. The won pair rose almost 15% in 2024, with increased political turmoil in the country adding to the pressure to win.

The Singapore dollar pair fell 0.2% on Thursday, helped by gross data that showed the economy grew more than expected at 4% in 2024.

However, there was a keen slowdown in the fourth quarter, raising doubts about the island nation’s economic prospects in the coming quarters.

The Australian dollar pair rose 0.5% after falling to its lowest level in over a year, while the Indian rupee pair fell 0.3% after hitting a record high of 86 rupees this week.