Yuan Rallies Despite Dollar Surge Following US Inflation Data

The yuan strengthened in volatile trading on Friday, despite a dollar rally following unexpected US core consumer price index data. The offshore yuan pair fell as much as 0.1% to 6.7060 after initially rising to 6.7148 immediately following the CPI release.

The onshore yuan pair declined 0.1% to 6.7055, after earlier climbing to 6.7138.

Zhaopeng Xing, senior China strategist at Australia & New Zealand Banking Group, said that if the Fed raises rates, the yuan may stabilize around 6.70 and the yield curve will flatten.

Elias Haddad, global head of market strategy at Brown Brothers Harriman, stated that the Chinese currency will remain largely unaffected by the Fed decision, 'aside from a short-term blip.'