The offshore yuan traded around 6.81 per dollar on Wednesday, remaining close to its highest level since March 2023, as improving expectations for China’s economic outlook and a weaker greenback supported the currency. The country’s economy is expected to grow by 4.8% year-on-year in the first quarter of 2026 despite the ongoing Middle East war, marking a modest rebound from 4.5% in the fourth quarter of 2025, which was the slowest pace since the post-pandemic reopening in 2022. The prolonged Middle East conflict has had only a limited impact on China, helped by years of efforts to strengthen energy security and reduce exposure to external shocks. Externally, the yuan has also drawn strength from a weaker US dollar, as safe-haven demand for the greenback has eased after reports that Washington and Tehran are preparing for a second round of talks in the coming days.
