Analysts expect the Chinese yuan could strengthen against the US dollar in September, potentially reaching 6.70 to 6.73 per dollar, driven by seasonal factors such as typically stronger exports, the end of the dividend payment season, and a weaker dollar if US inflation data comes in below expectations, reducing the likelihood of further Fed rate hikes. Over the past month, the offshore yuan has moved in a range of just 560 pips, compared with a monthly average of about 845 pips in 2026, reflecting sluggish trading partly due to the People's Bank of China's daily reference rate being weaker than expected for more than four consecutive months, the longest stretch since Bloomberg began compiling data in 2018. Carie Li, a strategist at DBS Bank, estimates the yuan could strengthen to those levels if US inflation is lower than expected, while BNY and Bloomberg Intelligence also see a stronger yuan. Wee Khoon Chong, senior Asia-Pacific market strategist at BNY, notes the dollar-yuan pair is likely to decline on dollar weakness, but the yuan's strength has not yet coincided with a broad-based recovery in China's economy. Stephen Chiu, head of emerging market strategy at Bloomberg Intelligence, sees Chinese export orders likely increasing, especially for electronics, which will support the export sector and the yuan, and expects September could be the point when the yuan starts to move decisively again.
Analysts expect yuan to strengthen to 6.70-6.73 per dollar, driven by seasonal factors and potential weaker US inflation reducing Fed hikes.
DBS Group Holdings Ltd
