Investing.com-- Most Asian currencies firmed slightly on Tuesday, while the dollar retreated further from recent one-year highs amid persistent bets that the Federal Reserve will cut interest rates in December. 

Regional markets were also bracing for more economic cues from China and Japan this week, as well as a swathe of purchasing managers index readings from major economies. 

Most Asian currencies were nursing steep losses through the past week, as strong U.S. inflation readings and less dovish statements from the Federal Reserve sparked some uncertainty over just how much interest rates will fall in the coming months. 

Donald Trump’s election win also saw traders pile en masse into the dollar, putting the greenback at a one-year high.

But the dollar index and dollar index futures fell 0.1% each on Tuesday, retreating further from recent peaks as markets held on to bets that rates will fall in the short-term.

Traders were seen pricing in a 59.8% chance for a 25 basis point cut in December, and a 40.2% chance rates will remain unchanged, CME Fedwatch showed.

This notion offered some relief to Asian markets, although the longer term outlook for rates still remained uncertain, especially in the face of a Trump presidency. 

Chinese yuan muted as LPR decision looms 

The Chinese yuan moved little on Tuesday, with the USDCNY pair remaining in sight of recent three-month highs. 

Focus this week is on an interest rate decision by the People’s Bank of China, although economists expect the central bank to leave its loan prime rate unchanged on Wednesday.