The offshore yuan strengthened to around 6.72 per dollar on Thursday, extending overnight gains and reaching its strongest level since February 2023 as continued weakness in the U.S. dollar supported Asian currencies. The dollar remained under pressure as expectations for further Federal Reserve rate hikes eased, while expanded bond buybacks increased demand for longer-dated Treasuries and weighed on the greenback. The yuan’s gains were moderated by a softer-than-expected PBOC (People’s Bank of China) fixing at 6.7808 per dollar, signaling authorities’ preference for a measured pace of appreciation. The central bank also kept its benchmark lending rates unchanged at record lows for a fifteenth consecutive month, holding the one-year LPR (benchmark loan rate) at 3.0% and the five-year LPR at 3.5% amid lingering domestic and external uncertainties.