The yuan strengthened in volatile trading on Friday despite a dollar rally triggered by unexpected U.S. core consumer price index data. The offshore USD/CNH pair fell as much as 0.1% to 6.7060 after initially rising to 6.7148, while the onshore USD/CNY pair declined 0.1% to 6.7055 after reaching 6.7138 earlier. Zhaopeng Xing, senior China strategist at Australia & New Zealand Banking Group, said before the data release that a Fed rate increase could stabilize the yuan around 6.70 and flatten the yield curve, leaving room for 10-year and 30-year yields to decline. Elias Haddad, global head of market strategy at Brown Brothers Harriman, said the yuan should remain largely unaffected by the Fed decision apart from a short-term move. The Hong Kong dollar remained steady against the dollar at 7.8424.