Offshore yuan stabilizes ahead of PBoC rate decision

The offshore yuan stabilized around 7.28 per dollar as traders await the People’s Bank of China’s loan prime rate decisions later this week for insights into future policy moves.

Offshore yuan stabilizes ahead of PBoC rate decision

The central bank has pledged to stabilize the yuan and manage exchange rate expectations amid ongoing economic challenges and potential US trade tensions. This week, traders also processed various financial data, including slower-than-expected retail sales growth in November, indicating weakened consumption, and new home prices falling for the 17th consecutive month, pointing to continued struggles in the property sector. On a positive note, industrial production growth exceeded expectations last month.

Yuan gains as US dollar weakens ahead of Fed rate cut

The yuan also found support as the US dollar weakened ahead of the Federal Reserve’s monetary policy announcement. The Fed is widely expected to cut rates by 25 basis points on Wednesday. Still, traders are focused on 2025 rate cut expectations, particularly amid concerns over inflation and Trump’s potential return to the White House.