CNH

The offshore yuan steadied around 6.79 per dollar on Monday, 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 6.83 per dollar on Wednesday, remaining near a recent more than three-year high, as it heads into a period of expected seasonal weakness that may arrive earlier than usual this summer. Chinese firms are accelerating foreign exchange hedging ahead of a record wave of dividend payments scheduled for June through August, with mainland companies listed in Hong Kong expected to distribute nearly $70 billion in payouts. Instead of waiting closer to payout dates, many are locking in rates early due to lower cost of currency purchases and forward rates are cheaper than the spot market. Pressure on the yuan comes from renewed US–China tensions, including Washington’s sanctions on a major refiner and warnings of possible secondary sanctions on banks. Meanwhile, China’s blocking of Meta’s acquisition of AI startup Manus, along with stricter export compliance and supply chain rules, has further contributed to a more cautious sentiment for the yuan.

The offshore yuan edged higher to around 6.82 per dollar on Monday, remaining near its strongest level since February 2023, as robust economic data lent support to the currency. China’s industrial profits soared 15.5% year-on-year in Q1 2026, accelerating from 15.2% in the January–February period. The expansion highlights the resilience of the country’s industrial base, even as tensions in the Middle East continue to weigh on the global outlook.

In a related development, Iran has reportedly presented to the US with a new proposal aimed at reopening the Strait of Hormuz and de-escalating the conflict. While geopolitical uncertainty persists, domestic producer prices are showing early signs of recovery after more than three years of deflation, helping to ease pressure on industrial firms that have been grappling with rising input costs linked to the conflict. China’s industrial sector remains central to its post-pandemic recovery, supported by resilient exports.

The offshore yuan weakened past 6.83 per dollar on Friday, heading for its first weekly decline in three weeks, as the greenback continued to strengthen amid little sign of easing in Middle East tensions. President Trump ordered a “shoot and kill” against Iranian boats allegedly laying mines in the Strait of Hormuz, injecting fresh volatility into energy markets.

Surging crude costs are already feeding through supply chains, prompting some Chinese exporters to raise prices to offset higher fuel and raw material expenses. In March, several consumer goods categories recorded notable annual costs increases, reversing a prolonged period of relative price stability. Despite these headwinds, analysts remain cautiously optimistic about the yuan’s broader trajectory, noting that China’s substantial domestic energy reserves, along with signs of a steady economic recovery, could help anchor the currency and limit sustained depreciation pressure.