Offshore Yuan Nears 3-Week Low
The offshore yuan weakened past 6.71 per dollar on Thursday, hitting its lowest level in nearly three weeks, as a firm US dollar and uncertainty over the extension of the US-China trade truce weighed on the currency. The greenback remained supported by rising expectations for further policy tightening, with markets now pricing in around a 70% chance of a Fed rate hike in October, up from 55% a day earlier. Adding to pressure on the yuan, Treasury Secretary Scott Bessent said the US and China had agreed to extend their trade truce by two months, through January 10. However, China has yet to publicly confirm the expiration date, while the extension falls short of the three-to-six-month continuation previously suggested by some US officials. While expectations for the Trump-Xi summit remain subdued, the talks are expected to focus on artificial intelligence, Iran, Taiwan and broader economic ties, as both sides seek to preserve stability in bilateral relations.
71 per dollar on Thursday, hitting its lowest level in nearly three weeks, as a firm US dollar and uncertainty over the extension of the US-China trade truce weighed on the currency. The greenback remained supported by rising expectations for further policy tightening, with markets now pricing in around a 70% chance of a Fed rate hike in October, up from 55% a day earlier. Adding to pressure on the yuan, Treasury Secretary Scott Bessent said the US and China had agreed to extend their trade truce by two months, through January 10.
However, China has yet to publicly confirm the expiration date, while the extension falls short of the three-to-six-month continuation previously suggested by some US officials. While expectations for the Trump-Xi summit remain subdued, the talks are expected to focus on artificial intelligence, Iran, Taiwan and broader economic ties, as both sides seek to preserve stability in bilateral relations.