Yuan carry trade dims amid U.S. rate cut expectations

SHANGHAI/HONG KONG -- The previously booming yuan carry trade is coming to a turning point with an anticipated U.S. interest rate cut expected to add to the unwinding triggered by early August's plunge in Japanese equities.

The yuan strengthened to 7.0825 to the dollar in intraday trading Friday in Shanghai, a level last seen in June 2023. It appreciated by more than 0.13 to the greenback in August alone -- its largest monthly gain in nine months -- rebounding from late July's lows.