Yuan Resists Dollar Rally Amid US Inflation Surprise

The yuan strengthened in volatile trading on Friday after the release of US core consumer price index data. The offshore yuan pair fell as much as 0.1% to 6.7060, but initially rose to 6.7148 immediately following the CPI release.

The onshore yuan pair declined 0.1% to 6.7055 after earlier climbing to 6.7138. Analysts expect the Fed's interest rate decision next week may have a short-term impact on the Chinese currency, but ultimately it will remain largely unaffected.

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, with room for both 10-year and to decline.