13.07.202603:49:47UTC+00Offshore Yuan Slips on Stronger Dollar

The offshore yuan weakened to around 6.78 per dollar on Monday, retreating from the near three-week high hit in the previous session, as escalating tensions in the Middle East boosted demand for safe-haven assets. The US dollar advanced after a sharp rise in oil prices rekindled expectations that the Federal Reserve may need to keep monetary policy tighter for longer, following a weekend of intensified clashes between the US and Iran and persistent uncertainty over shipping through the Strait of Hormuz. The yuan’s decline was partly limited by the People’s Bank of China’s midpoint fixing at 6.7972 per dollar, its strongest level since February 10, 2023, though the fixing was still 122 pips weaker than Reuters’ estimate. Investors are now looking ahead to a slate of key Chinese economic indicators due later this week, including trade data, Q2 GDP, industrial production, retail sales, and unemployment figures.