# PCE Inflation

The Yuan’s Summer Cooling: Fed Hawkishness and Seasonal Headwinds Challenge the RMB’s Rally

The Chinese Yuan has retreated to the 6.8 level as a hawkish Federal Reserve and rising U.S. inflation drive a dollar rebound. While strong exports and massive corporate dollar holdings provide a buffer, seasonal dividend payments and shifting interest rate expectations are ushering in a period of two-way volatility.