Asian Currencies Mixed on Jan 1, 2026; Fed Rate-Cut Expectations May Offer Support

On January 1, 2026, Asian currencies exhibited mixed performance against the U.S. dollar during the morning session, per The Wall Street Journal [1]. Detailed exchange rate data from internal market sources [0] provides granular insights:

• USD/KRW (U.S. Dollar to South Korean Won)
  : Open at 1440.50, closed at 1442.72, reflecting a stronger dollar against the won over the trading day.
• USD/CNY (Onshore Chinese Yuan)
  : Reached 6.9955 at 13:25 UTC.
• USD/JPY (U.S. Dollar to Japanese Yen)
  : Approximately 156.86 at 20:30 UTC (calculated from 1 JPY = 0.006375 USD).
• USD/CNH (Offshore Chinese Yuan)
  : Traded at 6.97853 at 08:23 UTC, showing a slightly stronger yuan offshore than onshore.

The mixed movements reflect short-term market dynamics, but Fed rate-cut expectations are highlighted as a potential support driver. Historical patterns indicate Fed rate cuts typically reduce U.S. dollar appeal, which could strengthen Asian currencies against the dollar [0].

1. The USD/KRW pair’s upward trend contrasts with stable snapshots of USD/CNY, USD/JPY, and USD/CNH, demonstrating varied responses across Asian currencies to immediate market forces.
2. Fed rate-cut expectations create a countervailing long-term bias toward potential Asian currency strength, offsetting the day’s mixed trends.
3. The 6.9955 USD/CNY and 6.97853 USD/CNH rates reveal a slight divergence between onshore and offshore yuan markets, reflecting differing sentiment across trading environments.

• Risks
  : If Fed rate-cut expectations fail to materialize (e.g., due to robust U.S. economic data), the dollar may remain strong, sustaining mixed or weak Asian currency performance [0].
• Opportunities
  : Confirmation of Fed rate cuts could trigger broad-based dollar weakness, strengthening Asian currencies. This would benefit Asian importers (reducing dollar-denominated input costs) and investors holding Asian currency assets [0].

On January 1, 2026, Asian currencies traded mixed against the U.S. dollar, with the dollar strengthening against the South Korean won while other major pairs showed stable intraday levels. Fed rate-cut expectations are a critical external factor that could support Asian currencies by potentially weakening the dollar. The analysis presents objective exchange rate data and market context for decision-making purposes, without providing prescriptive investment recommendations.