Offshore Yuan Falls, Still Set for Weekly Gains

2026-03-20 03:17 By Czyrill Jean Coloma 1 min. read

The offshore yuan weakened to 6.89 per dollar on Friday, reversing the previous session’s gains as a stronger greenback weighed on the currency.

The US dollar advanced after major central banks warned that the ongoing Middle East conflict could stoke inflation, prompting traders to scale back expectations for a Federal Reserve rate cut this year.

In China, the central bank kept key lending rates unchanged for a tenth straight month in March 2026, with the one-year loan prime rate at 3% and the five-year at 3.5%.

The cautious stance reflects mounting uncertainties, including surging oil prices driven by Middle East tensions, while China’s lower 2026 growth target of 4.5%–5% has reduced the urgency for monetary easing.

Analysts said that higher oil prices could help China exit prolonged deflation, but they emphasized that, with weak demand or reduced industrial overcapacity, manufacturers may still face rising input costs.

Despite Friday’s decline, the yuan is still set for weekly gains.



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Offshore Yuan Falls, Still Set for Weekly Gains
The offshore yuan weakened to 6.89 per dollar on Friday, reversing the previous session’s gains as a stronger greenback weighed on the currency. The US dollar advanced after major central banks warned that the ongoing Middle East conflict could stoke inflation, prompting traders to scale back expectations for a Federal Reserve rate cut this year. In China, the central bank kept key lending rates unchanged for a tenth straight month in March 2026, with the one-year loan prime rate at 3% and the five-year at 3.5%. The cautious stance reflects mounting uncertainties, including surging oil prices driven by Middle East tensions, while China’s lower 2026 growth target of 4.5%–5% has reduced the urgency for monetary easing. Analysts said that higher oil prices could help China exit prolonged deflation, but they emphasized that, with weak demand or reduced industrial overcapacity, manufacturers may still face rising input costs. Despite Friday’s decline, the yuan is still set for weekly gains.
2026-03-20
Offshore Yuan Rebounds
The offshore yuan strengthened to 6.90 per dollar on Thursday, rebounding from the previous session as fading expectations of an imminent rate cut by the People’s Bank of China lent support to the currency. Beijing's rate markets signaled a reduced likelihood of further monetary easing, as recent data suggest a stronger-than-expected start to 2026, alongside a modest rebound in consumer prices and easing factory-gate deflation. At the same time, a sharp surge in global oil prices, driven by escalating conflict in the Middle East, is potentially limiting the scope for aggressive monetary loosening. Investors are adjusting their outlook, with markets now leaning toward a steady or slightly firmer policy stance from the central bank. Attention is now turning to Friday’s announcement of China’s benchmark loan prime rates, where the one-year and five-year tenors are widely expected to remain unchanged at 3.0% and 3.5%, respectively.
2026-03-19
Offshore Yuan Slips on Dollar Strength
The offshore yuan slipped to around 6.88 per dollar on Wednesday, snapping a two-session winning streak, as a strengthening greenback weighed on the currency. The US dollar gained as the Federal Reserve held its federal funds rate unchanged, while signaling a single rate reduction this year and a further cut in 2027, consistent with its December outlook. Still, the yuan remained supported by China’s lower exposure to oil shocks, resilient exports, and exporters’ continued dollar selling. Recent data also showed that China’s factory output growth accelerated in January and February, while retail sales rebounded. Meanwhile, US President Donlad Trump asked Xi Jinping to postpone their meeting by about a month so he could remain in Washington to oversee the Middle East conflict, though the delay may be manageable for Beijing as officials from both sides met in Paris in recent days to continue trade talks.
2026-03-17