The offshore yuan strengthened to around 6.76 per dollar on Wednesday, extending gains from the previous session to its strongest level in a month, supported by a weaker US dollar even as China’s economic data pointed to uneven growth. The greenback remained under pressure after softer-than-expected US inflation data reduced expectations for a near-term Federal Reserve rate hike, with traders now pricing in a pause at the July meeting despite ongoing oil-driven inflation risks. Meanwhile, China’s economy expanded 4.3% year-on-year in Q2, marking the weakest growth since Q4 2022 and falling below Beijing’s 2026 target range of 4.5%–5.0%. Fixed-asset investment declined 5.7% in the first half, worse than both market expectations and the January–May decline. However, signs of resilience emerged as industrial production accelerated to a three-month high of 5.3% in June, retail sales rebounded 1%, and the urban unemployment rate eased to a one-year low of 5.0%.
