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20.08.202602:29:03UTC+00Offshore Yuan Strongest Since 2023

The offshore yuan strengthened to around 6.72 per dollar on Thursday, extending its overnight advance and marking its firmest level since February 2023, as persistent US dollar weakness continued to underpin Asian currencies. The greenback stayed under pressure amid fading expectations of further Federal Reserve rate hikes, while the announcement of expanded US bond buybacks lifted demand for longer-dated Treasuries and added to the dollar’s decline.

Upside in the yuan was capped, however, by a softer-than-expected daily fixing. The People’s Bank of China set the midpoint at 6.7808 per dollar, signaling that authorities still favor a gradual, controlled pace of currency appreciation. On the policy front, the central bank left its benchmark lending rates at record lows for a fifteenth consecutive month, keeping the one-year loan prime rate (LPR) at 3.0% and the five-year LPR at 3.5%. The decision underscores policymakers’ cautious stance in the face of persistent domestic and external uncertainties.

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