The US Dollar Index extended gains, breaking above 108 to a six-month high. Supported by hawkish Fed signals, markets expect the Fed to cut rates only once in 2026, or even delay until after September. On April 15, the USD/CNY central parity rate was set at 6.8582, up 11 pips from the previous session.

Major currencies traded with divergence. EUR/USD edged down 0.017% to 1.1789, but rose against the yuan. GBP/USD posted a small gain, while the yen remained weak, with USD/JPY rising to 158.91. The onshore and offshore yuan remained relatively stable: USD/CNY traded at 6.8212 onshore and 6.8132 offshore.

The dollar’s strength stemmed from both Fed policy and geopolitical risks. Goolsbee emphasized that if oil prices boosted inflation, the Fed might keep rates high through 2027. CME FedWatch showed a 98.4% chance of unchanged rates in April and only 1.6% for a June cut.

Emerging market currencies came under pressure, with several central banks selling gold to stabilize exchange rates. The yuan was supported by China’s economic recovery, showing relative resilience. Analysts believe the dollar will stay strong in the short term; a de-escalation in US-Iran tensions and cooling inflation could trigger a periodic pullback. The People’s Bank of China will maintain exchange rate flexibility and stabilize market expectations.