Investing.com – Most Asian currencies fell on Monday amid continued pressure from a strengthening dollar as better-than-expected U.S. jobs data boosted expectations that interest rates will fall at a slower pace in 2025 .

Regional trade volumes were somewhat subdued due to a holiday in the Japanese market, although the yen also remained largely volatile like its regional peers.

Positive trade data with China has done little to lift sentiment in the region, and the yuan remains volatile despite the People’s Bank’s efforts to support the currency.

Dollar highest in 24 months after forceful employment data

And rates rose in Asian trade after hitting their highest levels since November 2022 on Friday.

The dollar was strengthened mainly by stronger-than-expected data for December, which showed that the American labor market remains forceful.

The reading came amid heightened concerns that a forceful labor market and sticky inflation will give the Federal Reserve even more impetus to slowly cut interest rates this year.

To this end, Consumer Price Index inflation data will be released on Wednesday and will be closely watched for further signals on interest rates.

A number of Fed officials also have speeches this week, after the minutes of the Fed’s December meeting showed growing concerns among policymakers about high inflation and labor market strength.

Goldman Sachs analysts said they now expect only two rate cuts in 2025, compared to earlier expectations of three cuts. The final Fed interest rate is also expected to be higher than initially expected.

Chinese yuan faint despite positive trade data, PBOC support

The Chinese yuan weakened on Monday, with the pair rising 0.3%.

The yuan weakened even as data showed the value of the Chinese dollar rose more than expected in December, helped by a huge rise in the value of the yuan.

However, this reading was largely linked to exporters loading their supplies ahead of US President-elect Donald Trump’s imposition of high trade tariffs on the country.

Trump, who takes office on January 20, announced he would impose tariffs on China on “day one” of his presidency.

Recent actions taken by the PBOC have done little to support the yuan. The central bank suspended bond purchase liquidity programs and also instituted a series of forceful mid-point corrections.

The focus now is on more stimulus from Beijing, especially in response to Trump’s tariffs.

Broader Asian currencies traded in a flat to low range, remaining pressured by the prospect of higher longer-term US interest rates.

The Japanese yen pair fell 0.1%, remaining weakened by uncertainty surrounding the Bank of Japan’s meeting later this month.

The Australian dollar pair rose 0.1% after falling to its lowest level in almost five years last week. The South Korean won pair fell slightly, while the Singapore dollar pair rose 0.1%.

The Indian rupee pair strengthened after touching recent record highs above Rs 86.