On August 19, the People's Bank of China set the yuan midpoint rate at 6.7854 against the U.S. dollar, marking an upward adjustment of 51 basis points. This level represents the strongest yuan valuation since February 8, 2023, with the magnitude of the increase being the largest recorded since July 15, 2026.

According to the CME Group's FedWatch tool, market expectations indicate a 65% probability that the Federal Reserve will maintain its current interest rate levels through September. Meanwhile, the probability of a 25-basis-point rate hike stands at 35% for the same period.

Looking further ahead to October, the FedWatch data reveals that the likelihood of the Fed holding rates steady is 51.4%, while the chance of a cumulative 25-basis-point increase is 41.3%. Additionally, there is a 7.4% probability of a total 50-basis-point hike by that meeting.