Offshore Yuan Slips on Stronger Dollar

The offshore yuan weakened to around 6.78 per dollar on Monday, retreating from a near three-week high reached in the previous session as escalating tensions in the Middle East boosted demand for safe-haven assets. The US dollar strengthened as surging oil prices revived expectations that the Federal Reserve may need to keep monetary policy tighter for longer, following a weekend of intensified clashes between the US and Iran and continued uncertainty over shipping through the Strait of Hormuz. However, the yuan’s losses were partly tempered by the People’s Bank of China’s midpoint fixing of 6.7972 per dollar, its strongest since February 10, 2023, although it was set 122 pips weaker than Reuters’ estimate. Investors are now awaiting a raft of key Chinese economic data due later this week, including trade figures, Q2 GDP, industrial production, retail sales, and unemployment data.

Register a Revolut Business Account