Offshore Yuan Remains Near 3-Week Low

The offshore yuan held losses around 6.91 per dollar on Friday, staying at its lowest level in nearly three weeks as market sentiment remained under pressure due to conflicting signals over potential de-escalation in the Middle East. In its latest development, US President Donald Trump announced he would extend a pause on attacks against Iran’s energy infrastructure into April, and described talks with Tehran as ‘going very well.’ However, an Iranian official dismissed a reported US proposal to end the conflict as “one-sided and unfair.” Losses in the yuan were partially cushioned by strong economic data from China. Profits at industrial firms soared 15.2% year-on-year to CNY 1.02 trillion in the first two months of 2026, marking a sharp rebound from just 0.6% growth in 2025. The figures point to improving momentum in China’s recovery, even as geopolitical tensions cloud the global outlook. Over the week, the yuan is set to post a weekly decline.

The offshore yuan fell to around 6.91 per dollar on Thursday, marking its third consecutive session of losses, tracking subdued global sentiment on conflicting signals regarding the de-escalation of Middle East tensions. Iran’s foreign minister said the country is reviewing a US proposal to end the war but has no plans to engage in direct talks to resolve the widening conflict. Trump recently sought support from major oil consumers, including China, to counter Tehran’s Strait of Hormuz closure. The call has largely gone unanswered, as China sees little benefit in intervening. Chinese and other non-hostile ships have reportedly continued transiting the strait, while the country’s strategic oil reserves and large green energy investments provide additional cushioning. Meanwhile, US President Donald Trump is scheduled to visit China in May for his first trip to the country in eight years, a closely watched journey that had been postponed due to the Iran crisis.

The offshore yuan fell to around 6.90 per dollar on Wednesday, extending losses from the previous session as investors remained cautious amid mixed signals over possible de-escalation in the Middle East. US President Trump said Iran had offered a goodwill gesture in negotiations linked to energy flows through the Strait of Hormuz, while Israeli media reported that Washington is seeking a one-month ceasefire to allow for talks. Separately, The New York Times said the US had presented Iran with a 15-point proposal to resolve the conflict. However, Tehran denied any negotiations with Washington, and Gulf states signaled they could join military action against Iran. Still, China stands to gain from the conflict due to its lower energy dependence and its edge in renewables. China's Premier Li also vowed to boost imports of high-quality foreign goods and promote balanced trade, while PBoC Governor Pan sought to calm concerns over China’s trade surplus.