Offshore Yuan Holds Firm Near 10-Month Peak

The offshore yuan held its recent decline below 7.14 per dollar on Tuesday, but stayed near its highest level in ten months, as investors continued to assess geopolitical developments.

Attention was on the Shanghai Cooperation Organization summit in Tianjin, where Chinese President Xi Jinping emphasized a multipolar framework alongside Russia and India, highlighting plans for new regional financial institutions to lessen reliance on the US dollar.

Analysts said the push could bolster long-term demand for the yuan, particularly after China reported a record trade surplus of over $685 billion in the first seven months of 2025.

Supporting sentiment, hedge funds have recently raised bullish bets that the yuan could strengthen past 7 per dollar, betting on policy support and rising exporter conversions of dollar earnings.

Still, tensions linger as US-India trade frictions escalate, with Trump doubling down on tariffs and criticism of New Delhi after Prime Minister Modi’s China visit.