CNH

The offshore yuan weakened to around 6.74 per dollar on Monday, retreating from a more than three-year high reached in the previous session, as softer inflation data underscored persistent weakness in domestic demand. Annual consumer inflation eased to a six-month low of 0.5% in July, reflecting declines in food prices and slower growth in non-food costs. Producer price inflation also moderated to 3.5% from 4.1%, marking its first slowdown since returning to positive territory in March amid an oil-price surge triggered by Middle East tensions. Meanwhile, the Political Bureau of the Communist Party of China Central Committee recently pledged more proactive and effective macroeconomic policies, including the faster deployment of fiscal funds and bond proceeds, while continuing to support large-scale equipment upgrades and consumer goods trade-in programs. It also emphasized the need to boost domestic demand as consumer spending remains subdued despite solid exports and industrial output.

The offshore yuan held firm around 6.74 per dollar on Friday, remaining at its strongest level since early February 2023, as Beijing’s efforts to accelerate the yuan’s internationalization continued to bolster the currency. A growing number of Chinese commercial banks have added roughly a dozen currencies to their direct yuan settlement and clearing networks, including the Thai baht, Brazilian real, and Kazakhstani tenge. The latest move is expected to help Chinese firms further reduce their dependence on the US dollar as the country’s trade ties and overseas investments continue to expand, while also supporting President Xi Jinping’s ambition to build a “powerful currency.” Meanwhile, investors awaited upcoming trade data after China unveiled fresh retaliatory measures against the US, including tighter drone export controls, sanctions on seven American firms, and its first national security probe linked to foreign trade.

The offshore yuan held its gain around 6.74 per dollar on Wednesday, staying at its strongest level since early February 2023 as improving prospects for a renewed Middle East agreement boosted risk sentiment. Qatar said mediation efforts between the US and Iran had entered an advanced phase, with a draft agreement already prepared. US officials signaled growing confidence that a deal could be reached soon, raising hopes for the reopening of the Strait of Hormuz. On the domestic front, a private survey showed China’s Composite PMI fell to a one-year low of 50.8 in July 2026, reflecting slower momentum across the economy. The manufacturing PMI eased to a four-month low of 50.9, while the services PMI slipped to its weakest level in nearly two years at 50.4. Meanwhile, the People’s Bank of China announced a CNY 500 billion three-month outright reverse repo operation to maintain ample liquidity in the banking system, with bids determined through multi-tier interest-rate pricing.

The offshore yuan held its gains around 6.74 per dollar on Friday, remaining at its strongest level since February 2023, as investors raised expectations for additional policy support following PMI data releases. Official figures showed China’s manufacturing PMI fell to 49.2 in July 2026 from 50.3 in June, marking its first contraction since February, while the non-manufacturing PMI slipped to 49.0 from 50.2, signaling a renewed downturn after two months of modest expansion. The weak readings followed data showing Q2 GDP growth missed expectations and fell below the government’s 4.5%-5% target range. At the Politburo meeting, authorities vowed timely policy measures and to accelerate public spending and government bond fund usage. However, policymakers are expected to adopt a cautious approach to unveiling additional stimulus measures amid double-digit export growth.

The offshore yuan rose to around 6.76 per dollar on Monday, its strongest level since mid-June, as easing geopolitical tensions in the Middle East reduced safe-haven demand for the US dollar. US Ambassador Mike Waltz said President Trump had paused strikes on Iran for a second consecutive night to facilitate diplomatic efforts, while an Iranian military spokesperson said Tehran had suspended its retaliatory operations. The development signals a tentative easing in tensions after nearly two weeks of reciprocal attacks that had effectively undermined the June ceasefire. On the domestic front, investors are turning their attention to the upcoming Politburo meeting later this week, where President Xi Jinping and other top policymakers are expected to outline priorities for the second half of the year. Expectations for additional policy support have grown after recent economic indicators pointed to an uneven recovery, reinforcing calls for measures to bolster growth and stabilize demand.

The offshore yuan traded around 6.76 per dollar on Tuesday, reaching its strongest level in a month, supported by firmer official guidance from the People’s Bank of China. The central bank set the daily midpoint rate at 6.7917 per dollar, 31 pips stronger than the previous fixing of 6.7948. The latest move signaled continued support for the currency, even as geopolitical tensions in the Middle East boosted demand for the US dollar as a safe-haven asset. Providing additional support, the State Council emphasized accelerating policy implementation and improving the efficiency of fiscal spending, underscoring its commitment to bolstering growth after Q2 GDP slowed to 4.3%, the weakest pace in more than three years and well below Beijing’s annual target range of 4.5% to 5%. Investor focus is now turning to the Communist Party of China’s upcoming Politburo meeting later this month for signals on the economic policy agenda for the second half of the year.

The offshore yuan hovered around 6.77 per dollar on Monday, remaining near a one-week low as investors weighed escalating tensions in the Middle East and the People’s Bank of China’s decision to leave key lending rates unchanged. Sentiment remained fragile after the US launched fresh airstrikes against Iran over the weekend, while Tehran declared its ceasefire with Washington no longer in effect. On the monetary policy front, the People’s Bank of China left its key lending rates unchanged at record lows for a 14th consecutive month in July, with the one-year loan prime rate (LPR) held at 3.0% and the five-year LPR at 3.5%. The decision came despite softer-than-expected second-quarter economic data that underscored the uneven nature of China’s recovery, as robust manufacturing output and exports continued to provide support while sluggish consumer spending weighed on growth. Attention is now focused on the upcoming Politburo meeting later this month for signals on stimulus measures.