Dollar nears two-year high

The dollar is set to end the week on a high note on Thursday, nearing a two-year high, supported by expectations of a slower pace of interest rate cuts through 2025, while the yen struggled to stem losses but fell to a fresh low.

Currencies steadied after huge moves in the previous session, driven by the U.S. currency’s surge. The South Korean won fell to a 15-year low, the Canadian dollar fell to its weakest in more than four years, and the Australian and New Zealand dollars fell to two-year lows.

Early trading in Asia was quieter on Tuesday, although that did not prevent the yen from falling to a five-month low of 157.93 against the dollar, as it remains under pressure from the Bank of Japan’s reluctance to raise interest rates.

The Bank of Japan kept interest rates unchanged on Thursday and its governor did not comment on when it might raise borrowing costs, just a day after the Federal Reserve signaled it would slow the pace of rate cuts next year.