Offshore Yuan Retreats on Mixed PMI Data

2026-06-03 03:47 By Czyrill Jean Coloma 1 min. read

The offshore yuan weakened to 6.76 per dollar on Wednesday, retreating from a more than three-year high reached in the previous session, as investors weighed mixed PMI data that highlighted the fragility of China's economic recovery.

A private survey showed China's Composite PMI rose to a three-month high of 54 in May, with the services PMI also reaching a three-month peak of 54.4.

However, manufacturing activity lost momentum, with the PMI falling to 51.8 from April's five-year high of 52.2.

Earlier this week, official data painted a more subdued picture, showing the Composite PMI inching up to 50.5 from 50.1, supported by a modest pickup in non-manufacturing activity (50.1 vs 49.4), while the manufacturing PMI slipped to the expansion-contraction threshold of 50 from 50.3.

Moreover, risk sentiment remained restrained amid renewed tensions in the Middle East after Iran launched ballistic missiles toward neighboring countries, prompting retaliatory US strikes on Qeshm Island.



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Offshore Yuan Retreats on Mixed PMI Data
The offshore yuan weakened to 6.76 per dollar on Wednesday, retreating from a more than three-year high reached in the previous session, as investors weighed mixed PMI data that highlighted the fragility of China's economic recovery. A private survey showed China's Composite PMI rose to a three-month high of 54 in May, with the services PMI also reaching a three-month peak of 54.4. However, manufacturing activity lost momentum, with the PMI falling to 51.8 from April's five-year high of 52.2. Earlier this week, official data painted a more subdued picture, showing the Composite PMI inching up to 50.5 from 50.1, supported by a modest pickup in non-manufacturing activity (50.1 vs 49.4), while the manufacturing PMI slipped to the expansion-contraction threshold of 50 from 50.3. Moreover, risk sentiment remained restrained amid renewed tensions in the Middle East after Iran launched ballistic missiles toward neighboring countries, prompting retaliatory US strikes on Qeshm Island.
2026-06-03
Offshore Yuan Remains at Multi-Year High
The offshore yuan strengthened to around 6.76 per dollar on Tuesday, remaining at its strongest level since February 2023, as investors increasingly viewed Chinese assets as a relative safe haven amid heightened tensions involving Iran. Geopolitical uncertainty persisted after the latest developments indicated that Iran had suspended indirect talks with Washington over Israel's military operations in Lebanon, even as US President Trump asserted that negotiations remained ongoing. China's diversified energy supply base and comparatively limited direct exposure to the Middle East have reinforced the attractiveness of its financial markets during the conflict, underpinning the yuan's resilience. However, further upside in the yuan may be capped by Beijing's preference for exchange-rate stability, as reflected in the People's Bank of China's continued weaker-than-expected daily fixings, as well as potential dollar-buying interventions by major state-owned banks.
2026-06-02
Offshore Yuan Retreats from Over 3-Year High
The offshore yuan edged lower to around 6.76 per dollar on Monday, retreating from a more than three-year high reached in the previous session, as investors weighed mixed PMI data amid concerns about the economic impact of the ongoing Middle East conflict. Official data showed China's Composite PMI rose to 50.5 in May from 50.1 in April, supported by a slight rebound in the non-manufacturing sector (50.1 vs 49.4), while the manufacturing PMI (50.0 vs 50.3) edged lower. A private survey also showed that the manufacturing PMI slipped to 51.8 from April's five-year high of 52.2. Firms continued to closely watch developments in the Middle East as they faced subdued demand and higher input costs stemming from regional tensions. The prospects for a US-Iran ceasefire agreement remained uncertain, despite both sides having recently exchanged messages seeking amendments to a draft deal that would extend the ceasefire and reopen the Strait of Hormuz.
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