FX.co ★ Offshore Yuan Heads for Weekly Loss

The offshore yuan weakened to around 6.78 per dollar on Friday, putting it on track for a weekly loss as a resilient US dollar gained on mounting expectations of further rate hikes. While the Federal Reserve recently left interest rates unchanged, as widely expected, about half of FOMC policymakers now foresee at least one additional increase by the end of 2026. Domestically, traders are focused on next week’s fixing of the one- and five-year Loan Prime Rates (LPR), a decision that takes on added significance after a series of recent indicators highlighted the patchy nature of China’s economic recovery. At the same time, Hong Kong is preparing to launch its much-anticipated offshore yuan bond futures in August—a landmark move aimed at reinforcing the city’s role as a leading global offshore yuan center and advancing the broader internationalization of the currency.