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One of the most significant drivers of currency markets this year will likely be the anticipated monetary easing by the U.S. Federal Reserve (Fed). As the Fed signals slower rate hikes or potential pivots, this is expected to bolster Asian currencies broadly, including the Singapore dollar.

Within the region, certain currencies are poised to benefit more than others. The Japanese yen, which faced significant devaluation in 2022 due to Japan's cautious monetary stance, is expected to rebound if the Fed adopts a more dovish approach. The Japanese yen, having been a major casualty amid aggressive rate hikes last year, stands to gain from a more accommodating U.S. monetary policy.