--- title: "Dollar holds ground as Fed path pondered; won stable after martial law lifted" description: "The US dollar rebounded from a three-week low against the yen, bolstered by expectations of a potential Federal Reserve interest-rate cut. South Korea's won stabilized after a dramatic plunge, aided by central bank interventions following an abrupt reversal of martial law by President Yoon Suk Yeol. The Chinese yuan remains under pressure amid renewed US tariff threats, while the Australian dollar weakened after disappointing economic growth figures. The euro steadied as France's political crisis unfolds, with lawmakers set to vote on no-confidence motions that could lead to government collapse." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "Newsdeck" author: "Reuters" author_url: "https://www.dailymaverick.co.za/author/reuters/" canonical_url: "https://www.dailymaverick.co.za/article/2024-12-04-dollar-holds-ground-as-fed-path-pondered-won-stable-after-martial-law-lifted/" published: "2024-12-04T05:26:54" updated: "2024-12-04T05:26:57" lang: "en-ZA" word_count: 548 --- # Dollar holds ground as Fed path pondered; won stable after martial law lifted > Dollar holds ground as Fed path pondered; won stable after martial law lifted By Reuters · Published 4 December 2024, 07:26 SAST · Updated 4 December 2024, 07:26 SAST ## Key points - In a currency dance that could rival a soap opera, the US dollar waltzed back from a three-week low against the yen while the won flirted with martial law before retreating, and the yuan sulked under tariff threats, all as traders held their breath for the Fed's next move and Europe's political drama unfolded like a poorly scripted reality show. - The US dollar rebounded from a three-week low against the yen, bolstered by expectations of a potential Federal Reserve interest-rate cut. - South Korea's won stabilized after a dramatic plunge, aided by central bank interventions following an abrupt reversal of martial law by President Yoon Suk Yeol. - The Chinese yuan remains under pressure amid renewed US tariff threats, while the Australian dollar weakened after disappointing economic growth figures. - The euro steadied as France's political crisis unfolds, with lawmakers set to vote on no-confidence motions that could lead to government collapse. ## Content The US dollar recovered from a three-week low versus the yen on Wednesday and held its ground against other major rivals as traders pondered the chances of a Federal Reserve interest-rate cut this month. South Korea's won stabilised following its plunge to a two-year low on Tuesday and then a partial recovery after President Yoon Suk Yeol first unexpectedly declared martial law and then abruptly [reversed](https://www.reutersconnect.com/all?search=all%3AL2N3N40IR&linkedFromStory=true) the decision just hours later following a standoff with parliament. Dealers said the country's central bank may have supported the won at Wednesday's open by selling dollars. The Chinese yuan languished near its lowest in more than a year in offshore trading, pressured by renewed tariff threats from incoming US President Donald Trump, with traders watching how far Beijing is willing to let its currency slide. Australia's dollar weakened after data showed the economy expanded by [less](https://www.reutersconnect.com/all?search=all%3AL2N3N500Q&linkedFromStory=true) than economists estimated. The euro held its ground above its recent two-year trough, as French lawmakers prepared to vote on [no-confidence motions](https://www.reutersconnect.com/all?search=all%3AL2N3N4065&linkedFromStory=true) later in the day that are all but certain to topple the government. The US dollar index, which measures the currency against six top counterparts including the yen and the euro, added 0.07% to 106.39 at 0120 GMT. The dollar added 0.18% to 149.90 yen, continuing its recovery after dipping to 148.65 yen in the previous session for the first time since Oct. 11. The dollar got some support on Tuesday after [data](https://www.reutersconnect.com/all?search=all%3AL2N3N40P1&linkedFromStory=true) showed US job openings increased moderately in October while layoffs declined, even as Federal Reserve [officials](https://www.reutersconnect.com/all?search=all%3AL2N3N40V2&linkedFromStory=true) on the day did not provide definitive guidance on what they intend to do at the conclusion of their next policy meeting in two weeks' time. Traders are waiting for crucial monthly payrolls data on Friday for more steer on the rates outlook, while a private payrolls report due later on Wednesday will offer something of a preview. Market-implied odds of a quarter-point rate reduction on Dec. 18 last stood at 73%, according to CME's FedWatch Tool. The euro was little changed at $1.0506, where it has been making a home this week as the political crisis in France comes to a head. On Nov. 22, it had tumbled as low as $1.03315. "We're at the tail end of the crisis," said Marc Chandler, chief market strategist at Bannockburn Forex in New York. "They can't have an election until next July. So what they'll probably do is 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." Sterling was steady at $1.26645. The won was little changed at 1,413.80 per dollar after beginning Wednesday's trading with a 0.5% jump that reversed almost all of the losses of the previous session, when it plunged as low as 1,443.40 per dollar for the first time since October 2022. The offshore yuan edged down to 7.2948 per dollar, inching back towards the previous day's low of 7.3145, the weakest since November of last year. The Aussie fell 0.4% to $0.6461. Australia's economy grew at the slowest annual pace since the pandemic in the third quarter. Real gross domestic product rose 0.3% over the three months to September, missing market forecasts of 0.4% growth. (Reporting by Kevin Buckland; Editing by Muralikumar Anantharaman)