Offshore Yuan Remains at Over 3-Year Peak

The offshore yuan held steady for a second consecutive session at 6.79 per dollar on Wednesday, holding near its strongest level since February 2023, as markets positioned themselves ahead of the highly anticipated summit between US President Donald Trump and Chinese President Xi Jinping. Over the two-day talks, the leaders of the world’s two largest economies are expected to discuss a broad agenda that includes trade relations, tariffs, AI, Taiwan, and the ongoing Middle East conflict. However, President Trump has indicated he intends to focus primarily on trade, tempering the likelihood that the Iran conflict will feature prominently in the talks. Both sides are expected to push for an extension of the current trade truce, as tariffs remain a point of tension in the two countries’ relationship. China has long criticised US measures, while the Trump administration pursues investigations into Beijing’s trade practices.

The offshore yuan steadied around 6.79 per dollar on Tuesday, remaining at its strongest level since February 2023, supported by robust trade data ahead of a highly anticipated meeting between Presidents Donald Trump and Xi Jinping. Exports surged 14.1% year-on-year to a record USD 359.44 billion in April 2026, beating expectations and sharply accelerating from March, supported by investment tied to the global AI boom despite shipping disruptions caused by the closure of the Strait of Hormuz. Imports also jumped 25.3% from a year earlier to a fresh all-time high of USD 274.62 billion, signaling resilient domestic demand. Meanwhile, annual CPI came in above expectations at 1.2% in April, while PPI recorded its second straight month of increases at 2.8%. Investors are now focused on the closely watched Trump–Xi meeting in Beijing later this week, where the two leaders are expected to discuss the Middle East conflict, Taiwan, and a new framework for trade negotiations.

The offshore yuan traded around 6.79 per dollar on Friday, extending its rally to a fourth consecutive session and marking a fresh high since February 2023, as markets look ahead to a potential Trump–Xi summit next week. The two leaders are expected to meet in Beijing on May 14–15, a summit previously postponed due to geopolitical tensions linked to the Middle East conflict. In a fresh escalation, three US Navy destroyers transiting the Strait of Hormuz reportedly intercepted Iranian attacks and carried out retaliatory strikes. Uncertainty remains over the visit, with Xi Jinping’s government reportedly cautious about proceeding before the US–Iran standoff shows clearer signs of de-escalation. Separately, China’s financial regulators have reportedly ordered major banks to halt new financing for five US-sanctioned refineries over alleged Iranian oil ties, marking a shift from earlier guidance to disregard US sanctions. For the week, the currency is on track for a weekly gain.