Offshore Yuan Heads for Monthly Loss

2026-06-30 02:44 By Czyrill Jean Coloma 1 min. read

The offshore yuan weakened to around 6.79 per dollar in June, reversing two consecutive months of gains as a stronger US dollar and a series of softer-than-expected daily fixings from the People's Bank of China weighed on the currency.

The dollar strengthened as investors priced in higher-for-longer US interest rates, while ongoing uncertainty in the Middle East boosted demand for the currency's safe-haven appeal.

Additional pressure came from the PBoC's persistent setting of weaker-than-anticipated reference rates, reinforcing expectations that authorities are comfortable with a gradual depreciation of the yuan.

On the economic front, manufacturing PMI edged up to 50.3 from 50.0, exceeding market expectations of 50.1, supported by resilient demand for high-tech exports that helped offset trade disruptions linked to tensions in the Middle East.

Meanwhile, the non-manufacturing PMI edged up to 50.2 from 50.1, beating forecasts of 49.9 and signaling continued stabilization in the sector.



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Offshore Yuan Heads for Monthly Loss
The offshore yuan weakened to around 6.79 per dollar in June, reversing two consecutive months of gains as a stronger US dollar and a series of softer-than-expected daily fixings from the People's Bank of China weighed on the currency. The dollar strengthened as investors priced in higher-for-longer US interest rates, while ongoing uncertainty in the Middle East boosted demand for the currency's safe-haven appeal. Additional pressure came from the PBoC's persistent setting of weaker-than-anticipated reference rates, reinforcing expectations that authorities are comfortable with a gradual depreciation of the yuan. On the economic front, manufacturing PMI edged up to 50.3 from 50.0, exceeding market expectations of 50.1, supported by resilient demand for high-tech exports that helped offset trade disruptions linked to tensions in the Middle East. Meanwhile, the non-manufacturing PMI edged up to 50.2 from 50.1, beating forecasts of 49.9 and signaling continued stabilization in the sector.
2026-06-30
Offshore Yuan Edges Higher
The offshore yuan edged higher to around 6.79 per dollar on Monday, trimming losses from the previous week as the People's Bank of China unveiled a new policy initiative. The central bank introduced overnight reverse repo operations, injecting CNY 300 billion into the financial system to provide greater flexibility in short-term liquidity management and help smooth funding conditions in the interbank market. Separately, the PBoC injected an additional CNY 157.5 billion through seven-day reverse repos while leaving the borrowing cost unchanged at a record-low 1.4%, the benchmark rate that serves as China's main policy tool. However, the yuan's gains remained capped as the central bank continued to guide the currency lower through its daily fixing. The PBoC set the midpoint rate at 6.8175 per dollar, 134 pips weaker than the Reuters estimate. The focus now shifts to PMI data due later this week, which could provide fresh insight into the country's economic health.
2026-06-26
Offshore Yuan Holds Near 1-Month Low
The offshore yuan steadied around 6.81 per dollar on Thursday, hovering near a one-month low after the People’s Bank of China unveiled plans to introduce overnight reverse repo operations as part of its next phase of monetary policy reform. The central bank said it will conduct overnight reverse repurchase operations on June 29–30, providing fixed-rate overnight liquidity to better address short-term funding needs in the banking system. The new overnight reverse repo rate will complement the existing seven-day rate of 1.4%, bringing the PBOC’s policy toolkit closer in line with major global central banks such as the Federal Reserve. During the Lujiazui Forum, Governor Pan Gongsheng outlined the central bank’s plans to broaden overnight reverse repo operations. Externally, the yuan remained under pressure from a stronger US dollar amid growing market expectations of further Federal Reserve interest rate hikes later this year.
2026-06-25