The US dollar returned to its lowest level in three weeks against the yen on Wednesday and held steady against its main rivals, as traders questioned the chances of an interest rate cut from the Federal Reserve this this month.
The South Korean won stabilized after plunging to a two-year low on Tuesday, then partially recovering after President Yoon Suk Yeol unexpectedly declared martial law, before abruptly reversing its decision a few hours later, following a disagreement with parliament.
Brokers said the country's central bank may have supported the won at market open Wednesday by selling dollars.
China's yuan remained near its lowest level in more than a year in offshore trading, under pressure from new threats of tariffs from new US President Donald Trump, with traders monitoring how far Beijing is willing to let slide its currency.
The Australian dollar weakened after data showed the economy grew less than economists had estimated.
The euro held above its recent two-year low as French lawmakers prepare to vote on motions of no confidence later today that are almost certain to topple the government.
The U.S. dollar index, which measures the currency against six major counterparties including the yen and euro, added 0.07% to 106.39 by 0120 GMT.
The dollar added 0.18% to 149.90 yen, continuing its recovery after plunging to 148.65 yen in the previous session for the first time since October 11.
The dollar received some support Tuesday after data showed U.S. job openings rose moderately in October while layoffs declined, although Federal Reserve officials did not provide definitive guidance on what they intend to do at the conclusion of their next policy meeting in two weeks.
Traders await crucial monthly payrolls data on Friday for more information on the rate outlook, while the private payrolls report due later on Wednesday will offer insight.
According to the CME's FedWatch tool, the probability of a quarter-point interest rate cut on December 18 stood at 73%.
The euro was little changed at $1.0506, where it settled this week, as the political crisis in France draws to a close. By November 22, it had fallen as low as $1.03315.
“We are at the end of the crisis,” said Marc Chandler, chief strategist at Bannockburn Forex in New York.
“They can't have an election until next July. So they'll probably appoint a prime minister and try again, or let Barnier become the caretaker prime minister and pass some laws to keep the government going until July.”
The pound sterling remained stable at $1.26645.
The won was little changed at 1,413.80 per dollar after starting Wednesday's trading with a 0.5% jump that reversed almost all losses from the previous session, when it plunged as low as 1,443.40 per dollar. a dollar for the first time since October 2022.
The offshore yuan fell slightly to 7.2948 per dollar, closing in on the previous day's low of 7.3145, the weakest since November last year.
The Australian dollar fell 0.4% to $0.6461. In the third quarter, Australia's economy grew at the slowest annual pace since the pandemic.
Real gross domestic product grew 0.3% in the three months ending in September, missing market forecasts of 0.4% growth.
