Offshore Yuan Holds Near 2023 High

2026-08-17 07:22 By Czyrill Jean Coloma 1 min. read

The offshore yuan steadied around 6.73 per dollar on Monday, hovering near its strongest level since February 2023, supported by a weakening US dollar amid a batch of underwhelming Chinese economic data.

The greenback came under pressure after cooling US economic indicators led investors to further scale back bets of a near-term Federal Reserve rate hike, with markets now pricing in roughly a 67% chance that the Fed will keep rates unchanged in September, up from less than 50% a month ago.

On the domestic front, fixed-asset investment contracted 6.7% year-on-year in the first seven months of 2026, a steeper decline than the 6.2% drop expected by markets.

Moreover, industrial production slowed to 4.5% in July from 5.3% in June, falling short of forecasts for a 5% increase, while retail sales rose just 0.6%, missing expectations of 1.5% and easing from 1.0% growth in the previous month.

Meanwhile, the surveyed unemployment rate edged up to 5.2% in July, the highest level in three months.



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Offshore Yuan Holds Near 2023 High
The offshore yuan steadied around 6.73 per dollar on Monday, hovering near its strongest level since February 2023, supported by a weakening US dollar amid a batch of underwhelming Chinese economic data. The greenback came under pressure after cooling US economic indicators led investors to further scale back bets of a near-term Federal Reserve rate hike, with markets now pricing in roughly a 67% chance that the Fed will keep rates unchanged in September, up from less than 50% a month ago. On the domestic front, fixed-asset investment contracted 6.7% year-on-year in the first seven months of 2026, a steeper decline than the 6.2% drop expected by markets. Moreover, industrial production slowed to 4.5% in July from 5.3% in June, falling short of forecasts for a 5% increase, while retail sales rose just 0.6%, missing expectations of 1.5% and easing from 1.0% growth in the previous month. Meanwhile, the surveyed unemployment rate edged up to 5.2% in July, the highest level in three months.
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The offshore yuan traded around 6.74 per dollar on Friday, hovering near its strongest level since January 2023, supported by a firmer daily fixing from the People's Bank of China and broad-based weakness in the US dollar. The central bank set the midpoint rate at 6.7873 per dollar, its strongest fixing since February 8, 2023, although it came in 491 pips weaker than Reuters' model estimate. Externally, the yuan also found additional support from a weaker US dollar after data showed that US producer prices were unchanged in July, reinforcing expectations that the Federal Reserve may keep interest rates on hold next month. On the monetary policy front, the PBoC injected 349 billion yuan ($51.7 billion) via overnight reverse repos on Friday, marking its first mid-month operation of this kind and providing a boost to bond market sentiment. The operation reflects the central bank's efforts to fine-tune liquidity conditions and ease funding pressures related to tax payments.
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