The US dollar rose to a high and the Chinese yuan fell back to 6.8.

Since mid-June, there has been a significant switch in the foreign exchange market, with the US Dollar Index boosted by the unexpectedly hawkish policy of the Federal Reserve, leading to a phase of correction for the Chinese Renminbi. The US Dollar Index continued to rise to 101.5 on June 25th, before slightly dropping to 101.36 on the 26th. Exchange rates have also adjusted accordingly, with the onshore Renminbi against the US Dollar at 6.7978 and the offshore Renminbi at 6.8048 as of the close on the 26th. This round of Renminbi depreciation is primarily driven by the unexpectedly hawkish signals released by the Federal Reserve during its interest rate meeting. The economic forecast summary released by the Federal Reserve showed that officials increased their median prediction for the federal funds rate in 2026 from 3.4% in March to 3.8%. Wang Qing, Chief Macro Analyst at Orient Securities, stated that Federal Reserve Chair Jerome Powell, during his first interest rate meeting on June 16th, sent a hawkish signal that exceeded market expectations, significantly boosting the US Dollar and outweighing the impact of the US-Iran memorandum of understanding signed on the 15th and the fading risk aversion factors on the US Dollar. This led to the US Dollar Index rising from 100.4 on June 17th to 101.5 on the 25th.