The offshore yuan weakened to around 6.88 per dollar on Thursday, pressured by a strengthening US dollar. The greenback gained momentum as rising oil prices heightened concerns about inflation and could push the Fed toward a more hawkish policy stance. Additional pressure on the yuan came from a weaker-than-expected daily fixing by the People’s Bank of China, which set the midpoint rate at 6.8959 per dollar, 106 pips softer than Reuters’ estimates, signaling a softer official bias toward the currency. Meanwhile, robust trade data helped ease subdued market sentiment, with China’s exports surging 21.8% year-on-year to $656.6?billion in January–February 2026, while imports soared 19.8% to $443?billion. However, this momentum could face headwinds as the Trump administration launches Section 301 investigations to replace reciprocal tariffs recently struck down by the Supreme Court. The move allows the US to target imports from countries deemed to engage in unfair trade practices.
