The offshore yuan held steady around 6.73 per dollar on Monday, hovering near its strongest level since February 2023, as a weaker US dollar offset a fresh batch of disappointing Chinese economic data. The greenback came under pressure after softer US indicators prompted investors to further pare back expectations of a near-term Federal Reserve rate hike. Markets are now pricing in roughly a 67% probability that the Fed will leave rates unchanged in September, up from less than 50% a month earlier.
Domestically, fixed-asset investment fell 6.7% year-on-year in the first seven months of 2026, a sharper decline than the 6.2% drop anticipated by markets. Industrial production growth also lost momentum, slowing to 4.5% in July from 5.3% in June and undershooting forecasts for a 5% gain. Retail sales rose a modest 0.6%, missing expectations of 1.5% and easing from 1.0% growth in the prior month. At the same time, the surveyed unemployment rate inched up to 5.2% in July, the highest level in three months.
