Offshore Yuan Rebounds, Still Set for Weekly Loss

2026-03-06 03:03 By Czyrill Jean Coloma 1 min. read

The offshore yuan rose to around 6.9 per dollar on Friday, recouping some of the previous session’s losses as market sentiment improved on China’s efforts to expand the currency’s role in international markets.

Demand for yuan financing has been supported by Beijing’s low interest-rate environment, where persistent deflation has kept borrowing costs subdued.

Moreover, demand has been boosted by investors diversifying beyond the greenback, the PBoC’s recent cross-border financing measures, and economists’ calls for looser capital controls to enhance the yuan’s international appeal.

Separately, China’s central government has proposed a defense budget of CNY 1.91 trillion for fiscal year 2026, a 7% growth from the previous year.

If approved, it would mark the 11th straight year of single-digit defense spending growth and the smallest gain since 2021.

Despite Friday’s rebound, the yuan is set for a weekly decline as the US dollar strengthens on safe-haven demand amid Middle East tensions.



News Stream
Offshore Yuan Rebounds, Still Set for Weekly Loss
The offshore yuan rose to around 6.9 per dollar on Friday, recouping some of the previous session’s losses as market sentiment improved on China’s efforts to expand the currency’s role in international markets. Demand for yuan financing has been supported by Beijing’s low interest-rate environment, where persistent deflation has kept borrowing costs subdued. Moreover, demand has been boosted by investors diversifying beyond the greenback, the PBoC’s recent cross-border financing measures, and economists’ calls for looser capital controls to enhance the yuan’s international appeal. Separately, China’s central government has proposed a defense budget of CNY 1.91 trillion for fiscal year 2026, a 7% growth from the previous year. If approved, it would mark the 11th straight year of single-digit defense spending growth and the smallest gain since 2021. Despite Friday’s rebound, the yuan is set for a weekly decline as the US dollar strengthens on safe-haven demand amid Middle East tensions.
2026-03-06
Offshore Yuan Weakens on Lower GDP Target
The offshore yuan weakened to around 6.89 per dollar on Thursday, giving up gains from the previous session as market sentiment soured following Beijing’s newly lowered economic growth target. China set a GDP growth target of around 4.5%-5% for 2026, its most restrained goal since 1991, signaling policymakers’ growing willingness to tolerate slower growth as they shift the economy toward more sustainable drivers and reduce reliance on debt-fueled property and infrastructure investment. The lower target also underscores rising recognition in Beijing that the model which powered China’s rapid expansion for more than four decades is facing mounting structural pressures. However, losses were partially offset by a strong midpoint of 6.9007 per dollar, about 0.07% above the previous fixing and the highest in 34 months. Investors viewed the firmer midpoint as an effort by authorities to stabilize the yuan amid broad dollar strength and rising geopolitical tensions.
2026-03-05
Offshore Yuan Snaps 3-Session Decline
The offshore yuan strengthened past 6.89 per dollar on Wednesday, breaking a three-session losing streak, primarily driven by a firm daily fixing and strong corporate demand. The People's Bank of China set the fixing at 6.9124 per dollar, stronger than last week's pre-Middle East tension close. The move aimed to mitigate risks from a stronger US dollar and rising oil prices amid the geopolitical conflict. Additional support for the yuan were corporate clients converting foreign exchange revenue into yuan amid dollar strength. On the economic front, official data showed both manufacturing and services PMIs remaining below the 50-mark threshold. In contrast, a private survey reported continued expansion in both sectors. Market focus has also shifted to Beijing’s annual “Two Sessions”, the National People's Congress and the Chinese People's Political Consultative Conference, where policymakers are expected to outline economic policy, technological development, and defense.
2026-03-04