Chinese Yuan Hits 4-week Low

The Chinese Yuan touched 6.77 against the USD, the highest since June 2026. Over the past 4 weeks, US Dollar Chinese Yuan lost 0.16%, and in the last 12 months, it decreased 5.82%.

The offshore yuan strengthened to around 6.76 per dollar on Wednesday, extending gains from the previous session to its strongest level in a month, supported by a weaker US dollar even as China’s economic data pointed to uneven growth. The greenback remained under pressure after softer-than-expected US inflation data reduced expectations for a near-term Federal Reserve rate hike, with traders now pricing in a pause at the July meeting despite ongoing oil-driven inflation risks. Meanwhile, China’s economy expanded 4.3% year-on-year in Q2, marking the weakest growth since Q4 2022 and falling below Beijing’s 2026 target range of 4.5%–5.0%. Fixed-asset investment declined 5.7% in the first half, worse than both market expectations and the January–May decline. However, signs of resilience emerged as industrial production accelerated to a three-month high of 5.3% in June, retail sales rebounded 1%, and the urban unemployment rate eased to a one-year low of 5.0%.

The offshore yuan rose to around 6.77 per dollar on Tuesday, rebounding from the previous session as stronger-than-expected trade data pointed to resilient external demand. Exports surged 27% year-on-year to a record USD 412.4 billion, while imports jumped 36% to an all-time high of USD 286.8 billion, both exceeding forecasts. As a result, China posted its second-largest trade surplus on record at USD 125.6 billion, primarily driven by strong global demand for AI-related hardware and higher semiconductor prices. These factors continued to support Asia's trade flows, helping cushion the impact of domestic economic weakness. China's economy is projected to slow to 4.5% year-on-year in the second quarter on Wednesday, down from 5.0% in Q1 and near the lower end of Beijing's 2026 growth target range of 4.5%–5.0%. Growth has been weighed down by weak consumer spending, a prolonged property downturn, and subdued private investment.