The offshore yuan steadied around 6.76 per dollar on Friday, hovering near its strongest level since February 2023, bolstered by reports of an extended ceasefire agreement between the US and Iran. Both sides agreed to prolong the truce for another 60 days to allow further negotiations over Tehran’s nuclear program, although US President Donald Trump has yet to formally approve the arrangement. Meanwhile, China’s currency has drawn additional support from the global AI investment boom, which has fueled demand for Chinese technology exports and eased concerns in Beijing over yuan appreciation. For the month, the yuan remains on track for a second consecutive monthly gain despite continued weaker-than-expected daily midpoint fixings from the People’s Bank of China, as investors navigated rapidly shifting developments surrounding the Iran conflict while also assessing progress following the meeting between Presidents Donald Trump and Xi Jinping earlier this month.
Offshore Yuan Returns to Over 3-Year High
The offshore yuan edged higher to around 6.78 per dollar on Wednesday, returning to its strongest level since February 2023, buoyed by encouraging domestic economic data. Industrial profits in China jumped 18.2% year-on-year in January–April 2026, supported by robust demand for Chinese electronics and elevated oil prices linked to Middle East tensions. The figures followed earlier signs of slowing economic momentum reflected in industrial output and retail sales data. Still, gains in the yuan were capped after the People’s Bank of China set the daily midpoint fixing at 6.8291 per dollar, 408 pips weaker than a Reuters estimate. The central bank has consistently guided the fixing below market expectations, a move widely interpreted as an effort to maintain currency stability and prevent excessive yuan appreciation.
Offshore Yuan Rises to Multi-Year High
The offshore yuan strengthened to around 6.78 per dollar on Monday, reaching its strongest level since February 2023, as the greenback weakened amid signs of a diplomatic breakthrough in the Middle East. Over the weekend, a senior US official said that Washington and Tehran are edging closer to a deal that could reopen the Strait of Hormuz. However, President Donald Trump stressed that he would not “rush” into an agreement, while Iranian officials warned that the draft could still collapse. Meanwhile, Chinese President Xi Jinping is reportedly set to visit North Korea as early as this week or in early June, following his recent hosting of Presidents Donald Trump and Vladimir Putin within the span of a week. On the domestic front, investors are also turning their attention to China’s upcoming PMI data releases later this week, which are expected to offer fresh clues on the health of the economy following recent signs of slowing momentum in industrial output and retail sales.
Offshore Yuan Extends Fall on Weak Data
The offshore yuan weakened to around 6.81 per dollar on Monday, extending losses from the previous week as a series of weak economic data weighed on sentiment. New home prices across 70 major cities fell 3.5% year-on-year in April 2026, marking the sharpest pace of decline since May 2025, as existing stimulus efforts have yet to restore meaningful momentum in housing demand. Moreover, industrial output moderated to 4.1% year-on-year in April, marking the weakest expansion since July 2023, as disruptions linked to the Iran conflict weighed on manufacturing activity and export-oriented output. Retail sales growth also lost momentum, increasing just 0.2% year-on-year, the weakest performance since December 2022, highlighting subdued domestic consumption. On the labor front, China’s surveyed urban unemployment rate edged down to 5.2% in April from a more than one-year high of 5.4% in March, slightly better than market expectations and the lowest level since January.
Offshore Yuan Holds Firm on Trump-Xi Summit
The offshore yuan traded around 6.78 per dollar, holding near its strongest level since February 2023 as investors closely watched a high-stakes summit between US President Donald Trump and Chinese President Xi Jinping aimed at stabilizing relations between the world’s two largest economies. Trump arrived in Beijing on Wednesday and is set to meet Xi at the Great Hall of the People for talks covering a range of contentious issues. Trump is expected to urge Beijing to help facilitate the reopening of the Strait of Hormuz through its ties with Tehran, though he has downplayed the Iran conflict as a central topic, emphasizing trade and market access instead. Moreover, Trump has signaled that he will urge China to roll back barriers facing American companies and further “open up” its economy. The summit, delayed for weeks amid tensions tied to the Iran conflict, is being closely watched by markets for signs of a diplomatic breakthrough that could shape US-China relations and global trade.
Offshore Yuan Remains at Over 3-Year Peak
The offshore yuan held steady for a second consecutive session at 6.79 per dollar on Wednesday, holding near its strongest level since February 2023, as markets positioned themselves ahead of the highly anticipated summit between US President Donald Trump and Chinese President Xi Jinping. Over the two-day talks, the leaders of the world’s two largest economies are expected to discuss a broad agenda that includes trade relations, tariffs, AI, Taiwan, and the ongoing Middle East conflict. However, President Trump has indicated he intends to focus primarily on trade, tempering the likelihood that the Iran conflict will feature prominently in the talks. Both sides are expected to push for an extension of the current trade truce, as tariffs remain a point of tension in the two countries’ relationship. China has long criticised US measures, while the Trump administration pursues investigations into Beijing’s trade practices.
Chinese Yuan: Strengthens into US–China summit – Societe Generale
Societe Generale analysts observe USD/CNY trading below 6.80, with the Chinese Yuan at its strongest level since February 2023 ahead of the US/China summit. They attribute Yuan outperformance to safe-haven demand and solid trade data, while expecting only incremental outcomes from Trump’s visit, focused on trade discipline and limited confidence-building steps.
Safe-haven flows and trade surplus
“The Chinese yuan trades at the strongest level since February 2023, returning below 6.80/USD ahead of this week’s US/China summit. The outperformance of the Yuan in EM Asia this year has been more about China’s rising status as a safe-haven amid the geopolitical and energy storm.”
“Foreign trade data also continue to support the currency. Exports climbed 14.1% yoy, lifting the surplus to $84.82bn in April.”
“The visit of Trump is relatively low on expectations, underscored by a scaled‑down CEO delegation compared to 2017 and late invites that reflect internal policy divisions. The agenda will prioritize trade discipline and a possible short extension of the October trade truce, rather than headline‑grabbing deal announcements.”
“China will likely press for relief from US technology export controls and greater policy certainty, while Washington is set to hold the line, keeping outcomes incremental
Offshore Yuan Remains Strong
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.
