Dollar Holds Firm, Asian Stocks Rally

26 Dec 2024 , 10:53 AM

With the dollar hovering close to a two-year high and little news or data to change their course, Asia shares increased somewhat in holiday-thinned trading on Thursday, building on gains from earlier in the week.

Traders are now pricing in only roughly 35 basis points of easing for 2025 after Fed Chair Jerome Powell set the stage for fewer rate reduction next year at the central bank’s final policy meeting of the year.

Earlier in the week, the benchmark 10-year yield climbed above 4.6% for the first time since May 30 and was last stable at 4.5967%. So far this month, it has increased by about 40 basis points. At 4.3407%, the two-year yield also strengthened.

Trading volumes have started to decline as year-end draws near, and investors’ primary concern is still the Federal Reserve’s rate forecast. On Thursday, markets in Australia, New Zealand, and Hong Kong were closed for a holiday.

When compared to a basket of currencies, the dollar was trading at 108.15, close to a two-year high, and was expected to gain more than 2% per month.

Against a strong greenback on Thursday, the Australian and New Zealand dollars were among the worst losers, with the Aussie dropping 0.45% to $0.6241. The kiwi fell to $0.5650, down 0.51%.

The yen lingered close to a five-month low and recently traded at 157.45 per dollar, while the euro fell 0.18% to $1.0398.

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