FX.co ★ Offshore Yuan Extends Rally for Fifth Session

The offshore yuan appreciated beyond 7.14 against the US dollar on Thursday, marking its fifth consecutive session of gains, driven by a declining dollar. The pressure on the US dollar persisted as the market heightened its expectations for interest rate reductions by the Federal Reserve. The probability of a 25 basis point cut in September has increased to approximately 89%, up from 82% the previous week. This shift followed President Trump's contentious decision to remove Fed Governor Lisa Cook, coupled with statements from New York Fed President John Williams, who indicated that policymakers are seriously contemplating a rate decrease. In China, investors are attentively awaiting the release of PMI data over the weekend to gain more clarity on the nation's economic outlook, particularly amid ongoing uncertainty surrounding US-China trade relations. Recently, Trump issued a warning that China must provide the US with rare-earth magnets or face tariffs as high as 200%, while Beijing has grown increasingly sensitive about its influence in this sector.